(Adds quotes from central bank, economist, new inflation
* C.bank hold rates but raises 2017, 2018 CPI forecasts
* C.bank says economy to stay robust
* Some economists expect c.bank to hike rates this yr
By Enrico Dela Cruz and Neil Jerome Morales
MANILA, Feb 9 The Philippine central bank held
its benchmark interest rate steady on Thursday with the economy
expected to remain in a sweet spot of strong growth and
The policy-making Monetary Board voted to maintain the
overnight borrowing rate at 3.0 percent, as
predicted by 10 economists in a Reuters poll.
"While the global economic environment has become more
challenging due to expected shifts in macroeconomic policies in
advanced economies...domestic economic activity is expected to
stay firm," central bank officer-in-charge Nestor Espenilla
However, it raised its inflation forecasts for this year to
3.5 percent from 3.3 percent, and for next year to 3.1 from 3.0
percent, reflecting increases in oil prices and weaker peso.
The higher projections bolstered expectations the central
bank would raise its benchmark interest rate this year to keep
price pressures in check.
"We still expect the BSP to raise its interest rate corridor
by third quarter," said Eugenia Victorino, economist at ANZ in
"We expect inflation to remain on an upward trend
initially...Meanwhile robust domestic demand, coupled with the
government' push for infrastructure spending, will likely push
inflation higher throughout 2017," Victorino added.
The Philippine economy grew faster than expected at the end
of last year on robust domestic demand and infrastructure
spending, and is also seeing rising fuel costs.
The central bank has not tinkered with interest rates since
it raised the benchmark rate by 25 basis points in September
2014, as inflation has remained manageable despite strong growth
But it set the main rate at 3.0 percent when it moved to an
interest rate corridor system in June to make policy
transmission faster and more efficient.
(Reporting by Enrico dela Cruz and Neil Jerome Morales; Writing
by Karen Lema; Editing by Kim Coghill)