Latest Stories

BSP seen keeping rates steady


The central bank is expected to keep key interest rates unchanged in Thursday’s policy stance meeting, with monetary officials seen playing it safe by staying accommodative amid global uncertainties that threaten economic growth.

Financial giant HSBC, which thinks Philippine economic growth likely reached its peak growth rate for the year in the first quarter, said the Bangko Sentral ng Pilipinas (BSP) would likely keep interest rates on hold.

The conservative stance in Thursday’s meeting comes after several moves in the first half of the year that saw the central bank cut Special Deposit Account (SDA) rates by 150 basis points as well as the decision to ban the access of non-pooled trust accounts to the facility.

“Any significant movement in the future is contingent on the central bank’s ability to see through the fog, which is unlikely to take place at the next meeting or even the Sept. 12 meeting,” HSBC economist Trinh Nguyen said in a report. “Coupled with uncertainty in the external environment, growth in the Philippines is expected to decelerate in the second half. External headwinds are strong.”

HSBC said the Philippine economic growth would likely decelerate in the second quarter to 5.6 percent. Third-quarter growth is also expected to settle at 5.6 percent before improving slightly to 6.7 percent in the last three months of 2013.

As a result, growth for the whole year is expected to settle at 6.4 percent, slowing from the 7.8-percent expansion recorded in the first quarter.

HSBC said the BSP also did not seem concerned about the possibility of asset bubbles forming, particularly in the property sector. BSP Governor Amando M. Tetangco Jr. earlier said the drop in asset prices in June—a result of signals to an end of easy money policies in the United States—helped reduce the risk of bubbles forming in various asset classes.

“The central bank also stated that it is comfortable with the peso-dollar rate at around 41 to 43.5: $1 level, indicating that the current levels of the currency are not a major concern for policy makers,” HSBC said.

Coupled with its ease with the peso, the BSP is likely pleased with the results of its reducing the SDA rate and limiting of non-pooled trust funds to the facility,” the bank added.

HSBC said the gradual decline of the amount parked in the SDA facility since February suggested that funds were beginning to flow out of the facility and the rate of outflow was expected to accelerate in the coming months.

“With past policy still being filtered through, the BSP is unlikely to adjust the SDA rate further until the effects are well-monitored,” HSBC said.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Bangko Sentral ng Pilipinas , forecasts , Interest Rates , Philippines

  • I’m Yellow & I’m a Retard

    Keep the rates steady and aim for the stars:

    Triple BBB = Biazon Bilking BoC

    Triple AAA = Aquino, Abad & Abaya
    …..Aquino’s profligate dole-outs
    …..Abad’s generous porks
    …..Abaya’s PPP kickbacks

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Korea ferry captain defends actions, bodies seen in ship
  • Traffic starts to build up at toll plazas on Black Saturday
  • Flash floods hit 9 Tagum villages
  • No tsunami to hit PH after 6.9 quake jolts Solomon Islands–Phivolcs
  • Search resumes for bodies in Everest avalanche
  • Sports

  • Hamilton takes pole at Chinese Grand Prix
  • Duke’s Rodney Hood joining Jabari Parker in NBA draft
  • Phelps entered in 3 events at comeback meet
  • Boston prepares for huge wave of marathon visitors
  • Motivated LeBron James preps for postseason
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • Myx TV premieres Asian American ‘docu-series’
  • A nutty finale for ‘Scandal,’ TV’s craziest show
  • EXO postpones release of mini album ‘Overdose’
  • ‘X-men’ filmmaker slams ‘fabricated’ sex attack claims
  • Singer Chris Brown’s bodyguard on trial in DC
  • Business

  • Fiat-Chrysler to produce iconic Jeep in China from 2015
  • US commerce secretary spells out economic facet of ‘pivot to Asia’
  • Italy sells luxury state cars on eBay
  • Asian shares mostly up in quiet trade
  • Dollar up in Asia on US jobs data, Ukraine deal
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • We treasure our Sierra Madre
  • OFW from UAE tests negative for MERS-Cov–health chief
  • Multicultural flock marks Good Friday in San Francisco
  • Las Vegas ‘Pinoy Pride’ fest hails Filipino heritage
  • Marking Jesus’ journey on Good Friday
  • Marketplace