It is probable that the BSP will maintain a strong stance for the remainder of the year.

Analysts predict that the Bangko Sentral ng Pilipinas (BSP) will continue to hold a hawkish stance for the remainder of the year in order to bolster the economy.

According to Diwa C. Guinigundo, recently appointed country analyst for the Philippines at GlobalSource Partners, in order to meet the BSP’s projected full-year inflation rate of 5.8%, consumer prices should not exceed an average of 3.4% in the fourth quarter.

According to a report dated Oct. 5, the ongoing rice crisis is going to be challenging for both the BSP and the National Government. The BSP has made the right decision by not easing policy rates for the rest of the year, while the National Government seems unable to address the issue effectively.

Infl

The rate increased to 6.1% in September, marking the highest growth.fi

The rate has decreased to 5.3% in August after five months. So far this year, the figure stands at 5.3%.fl

In the current period, the inflation rate was 6.6%, which is higher than the 5.1% recorded a year ago and remains above the BSP’s updated forecast of 5.8% for 2023.

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According to Mr. Guinigundo, our forecasts for the current and upcoming year show that there will be no changes in monetary policy, at least for this year.

flation continue to materialize, it is possible that infl

The projected inflation rate may surpass the BSP’s updated forecast of 3.5% for 2024 and may exceed the target range of 2-4%.

“Supply shocks may be persistent — and this is what we are seeing today. The failure to put in place non-monetary measures lifted the lid, and infl

He stated that the retaliation came back with a strong force.

flation

The Monetary Board has maintained the benchmark interest rate at 6.25% since March, following a 425 basis point increase in borrowing costs starting in May 2022 in an effort to control inflation.flation.

Inquired about the possibility of the Monetary Board implementing an unscheduled interest rate hike in response to the unexpectedly high September figures, BSP Governor Eli M. Remolona, Jr. replied in a message on Viber on Thursday: “We have not made a decision yet. We are still studying the data.”

JEEPNEY FARE HIKE

The introduction of a P1 increase in jeepney fare, effective Sunday, is expected to contribute to…flationary pressures.

flation

According to Domini S. Velasquez, Chief Economist of China Banking Corp, the recent P1 increase in jeepney fares is expected to contribute approximately 0.17% to overall inflation.flation.

She mentioned that with the correction of oil prices, it is hoped that this will be the final increase in fares. Rather than increasing fares, the government could offer specific subsidies to drivers and operators, alleviating concerns for consumers.

Ms. Velasquez stated that if non-monetary strategies are insufficient in lowering headline inflation, the BSP may consider implementing another interest rate hike within this year.

“Despite this, we believe that focusing on supply rather than limiting demand would be a more suitable approach. This is particularly important in light of a moderate growth climate,” she stated.

She added that the infl

The Monetary Board’s upcoming policy review on Nov. 16 will be heavily influenced by the October inflation data and third-quarter GDP data.

Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said the BSP may pause next month if the third-quarter GDP report would refl

Enter a state of “technical recession.”   

3rd quarter by 2 central banks

“Our updated prediction for interest rates involves a reduction of 50 basis points in the third quarter by two central banks.”fi

In the first quarter of 2024, there will be a 25-basis point reduction, followed by another decrease in the second quarter,” he stated.

The third quarter’s gross domestic product information will become available on November 9th.

Meanwhile, according to MUFG Global Markets Research’s Senior Currency Analyst Michael Wan, the increase was more than anticipated.flation print likely means that the BSP will hike at its next meeting “or even earlier in an off

The meeting will take place in a recurring manner, following the BSP governor’s forward guidance.

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The predictions for economic growth for this year have been revised to 6.1% (up from the previous estimate of 5.5%) and for 2024 to 3.5% (up from 2.8%).

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-The fluctuation of the stock market may change based on the results of the US Federal Reserve’s meeting on November 2 (Manila time) and the month of October.flation print to be released on Nov. 6.

“We have updated our predictions and now anticipate that a reduction in the policy rate will not occur until the second quarter of 2024. Additionally, our projected policy rate for the end of 2024 has been raised to 5.5%, up from the previous estimate of 5.25%,” stated Keisha B. Ta-asan.