The Bangko Sentral ng Pilipinas 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 BSP to leave its key policy rate 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 BSP’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.