THE INFLATION-TARGETING Bangko Sentral ng Pilipinas is seen to keep interest rates steady on its next monetary setting next week, an economist from British banking giant HSBC said.
HSBC economist Joseph Incalcaterra said in an Oct. 30 research note that the local central bank would likely keep all rates unchanged on Nov. 12. “The central bank will likely point to risks stemming from El Niño,” he said.
A severe dryspell this year through early next year is seen to put pressures on food prices.
This year, HSBC expects the country’s inflation rate to average 1.6 percent, and surge to 3.3 percent next year.
In the meantime, HSBC expects the country’s third quarter gross domestic product (GDP) to grow at a faster pace of 6.5 percent from 5.6 percent in the second quarter. For the fourth quarter, growth is seen at 5.1 percent.
For the full year, HSBC sees the local economy growing by 5.5 percent this year wand by 5.6 percent in 2016. This is seen better than the average of 4.2 percent this year and 4.3 percent next year for six key Southeast Asian countries—Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
With a projected growth rate of 5.6 percent next year, the Philippines is seen to be the second best performing economy next to Vietnam which is forecast to grow by 6.7 percent.
On the political front, HSBC noted that the election campaign was heating up, particularly in the race for the top position of the land.
“Independent candidate Grace Poe officially announced her candidacy and is currently leading in the polls. President Aquino’s chosen successor, Mar Roxas, is a former investment banker and trade secretary, and is deemed to be pro-business. The third candidate is Jejomar Binay, the current vice president, followed by Senator Miriam Santiago, who is running for president for the third time,” the HSBC research said.
“We forecast private and government consumption to stay strong up until the elections, while investment may see a pick-up in the post-election period,” it said.