By Joann Santiago
MANILA, April 7 (PNA) — UK-based Barclays does not foresee any downward movement in the Bangko Sentral ng Plilipinas’ (BSP) policy rates this year but instead a possible hike in the last quarter of the year.
“BSP appears comfortable with its current policy stance, as although low inflation is leaving room to keep policy on hold, growth remains robust, making it unlikely that it will join other central banks in the region in easing policy,” the investment bank said in a research note.
As of the first quarter of this year, inflation averaged at 2.4 percent, at the lower half of the government’s two to four percent target for this year up to 2018.
Last March alone, rate of price increases slowed to 2.4 percent from month-ago’s 2.5 percent due to easing rice and food prices.
Barclays earlier projected March 2015 inflation to be at around 2.5 percent.
It forecasts a within-target inflation rate this year “with weaker food and energy inflation offset by firm core inflation.”
It said the country “should be a significant beneficiary of lower oil prices,” which bodes well for the rate of price increases.
“We continue to forecast the next policy move will be a hike, most likely in the fourth quarter of 2015, after the Fed (Federal Reserve) begins tightening,” it added.
To date, the BSP’s overnight borrowing or reverse repurchase (RRP) rate is at four percent while the overnight lending or repurchase (RP) rate is at six percent. (PNA)