Bangko Sentral ng Pilipinas will likely keep the key interest rate at 3 percent on Thursday, a London-based think tank said over the weekend.
Capital Economics said in its Emerging Asia Weekly issue that Bangko Sentral was not expected to change the overnight reverse repurchase facility, following the launch of the interest rate corridor system on June 3.
“Following the shift to an interest rate corridor system last month, the central bank in the Philippines looks highly likely to keep interest rates unchanged at 3 percent on Thursday,” the think tank said.
Capital Economics said while consumer price inflation increased in May to 1.6 percent, it was still below Bangko Sentral’s target range of 2 percent to 4 percent.
“And while inflation is likely to rise over the coming months as the low base caused by the fall in oil prices drops out of the annual comparison, it should remain relatively low for a while yet,” Capital Economics said.
It said the economy continued to grow at a decent pace, which meant there was little need for rate cuts.
The Philippines, along with three other Asian economies, is seen to have the best growth prospects in the region.
“The countries with the best prospects are those which are likely to experience the fastest nominal wage growth but also where consumers have low debt,” it said.
“Vietnam, India, the Philippines and Indonesia stand out on this basis,” it said.
