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2 months ago
Philippines central bank seen keeping rates steady for now, hike in H2: Reuters poll
May 9, 2017 / 4:28 AM / 2 months ago

Philippines central bank seen keeping rates steady for now, hike in H2: Reuters poll

2 Min Read

A logo of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) is seen at their headquarters in Manila, Philippines April 28, 2016.Romeo Ranoco

MANILA (Reuters) - The Philippine central bank looks certain to leave its benchmark interest rate unchanged at its policy review on Thursday, as inflation is not yet a threat even as economic momentum stays strong, a Reuters poll showed.

All 10 economists in a Reuters poll said they expected the central bank to leave its key policy rate PHCBIR=ECI at 3.0 percent, this week, but eight believed the central bank would start raising rates in the second half of the year.

Seven of the eight economists have penciled in a total 50-basis-point increase in the second half, which they said was warranted to head off rising upside risks to inflation from strong economic growth and higher utility costs.

Recent comments from central bank officials also pointed to no change in policy settings on Thursday, following last week's data showing headline inflation was unchanged at 3.4 percent in April, well within its 3-4 percent target for the year.

Governor Amando Tetangco, due to step down in July, said on Friday the central bank's monetary policy stance was appropriate. One of his deputies, Diwa Guinigundo, told Reuters on Sunday he saw no need to adjust rates given strong economic growth and stable inflation.

Deputy Governor Nestor Espenilla, who was named as successor to Tetangco on Monday, has said markets should expect a lot of continuity in terms of monetary policy and reforms when he takes over in July.

The central bank has kept its policy settings on hold since it raised rates by 25 basis points in September 2014. But it set it at 3.0 percent when it moved to an interest rate corridor framework in June to make policy transmission faster.

Reporting by Karen Lema; Editing by Jacqueline Wong

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