MANILA, Philippines -The 8.6-percent inflation in February, which was slower than was widely expected, increases the likelihood that the Bangko Sentral ng Pilipinas will go for a 0.25-percentage point increase of its policy rate to 6.25 percent on March 23, according to Goldman Sachs.
Still, the New York-based financial services firm said it was sticking to its forecast of a 0.5-ppt hike to 6.5 percent.
Goldman Sachs forecast the February readout at 8.8 percent year-on-year, which was to have been slightly faster than the 8.7 percent recorded in January.
The BSP itself was looking at 8.9 percent, forecasting a range of 8.5 percent to 9.3 percent.
“While [the February] inflation number was below 9 percent, and close to the lower band of the BSP [forecast range], we think that the ongoing acceleration in core inflation remains concerning,” the American group said.
“We continue to expect the central bank to raise its policy rate by 50 basis points [0.5 ppt] at the March meeting,” they said. However, they added, there was the possibility of a smaller 25bp [0.25 ppt] hike following lower-than-expected February inflation print.
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Philippines central bank gov sees 50 bps rate hike if inflation tops 9%