No change expected in BSP’s policy rate decision

Bangko Sentral ng Pilipinas (BSP) will announce its policy rate decision on 14 May. BSP to keep the reserve repo and special deposit account (SDA) rates on hold at 4% and 2.5%, respectively, says Standard Chartered. BSP sees no urgency to adjust policy rates given that inflation remains within its target range and 2015 growth appears to be positive.

Inflation has eased towards the 2% range: it was 2.2% in April, with YTD inflation of 2.4%. Inflation is expected to slow to 2.2% in 2015 from 4.2% in 2014, although potential weather disruptions and a rebound in energy prices may support inflation in the coming months. 

GDP growth is likely to remain buoyant, supported by domestic demand. BSP is expected to adjust policy rates in Q4, when inflation will likely trend up.