Philippines central bank to keep the RRP and SDA rates unchanged

Bangko Sentral ng Pilipinas (BSP) will announce its monetary policy decision on 25 June. It is expected to keep the reserve repo (RRP) and special deposit accounts (SDA) rates at 4.0% and 2.5%, respectively. 

There is a near-term bias towards easing, but it is believed that the central bank is comfortable with current trends. BSP expects growth to improve on more fiscal spending and is mindful of risks to inflation from El Niño-related food inflation and potential Brent price increases. 

It is also concerned about financial risk from an eventual Fed rate hike later this year. The Philippines also will release April trade data on 25 June. 

"We expect a trade deficit of USD 0.68bn, after a USD 0.26bn surplus in March",said Standard Chartered in a report on Wednesday.

Export data released in June was also poor. Exports contracted 4.1% y/y in April, the most in two years. This should put downward pressure on the trade balance, although a 5.7% drop is expected in imports versus a 6.8% drop in March, on lower commodity import values.