Halister News

(Bloomberg) -- Philippines’ central bank is likely to leave its monetary policy unchanged, given strong GDP growth and expected quickening in inflation, while it monitors global developments, Bloomberg strategist David Finnerty writes.

• Gov. Tetangco said on Feb. 5 that BSP will continue monitoring developments, including slower global growth and volatility in financial and commodity markets, “to see if the balance of risks is tilting such that there is need for adjustment in policy stance”
• 4Q GDP grew 6.3% y/y, fastest pace since 4Q 2014, suggesting monetary policy is still supporting economic growth
• While inflation slowed to 1.3% y/y in Jan. from 1.5% in Dec., Gov. Tetangco said last week that inflation is expected to “slowly rise” to within 2%-4% target in 2016, 2017, indicating BSP sees no immediate need to cut rates to spur a rise in CPI
• BSP will keep its overnight borrowing rate unchanged at 4.00%, according to all 14 economists in Bloomberg survey; decision due at 4:00pm local time today
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.