MANILA – Moody’s Analytics forecasts a steady policy rate for the Bangko Sentral ng Pilipinas (BSP) on Thursday, citing the limited aid any rate adjustment will have on the economy right now.
BSP’s policy-making Monetary Board (MB) slashed the central bank’s key rates by a total of 200 basis points in 2020, with the overnight reverse repurchase (RRP) facility rate now at record-low of 2 percent, to help lessen the economic impact of the pandemic.
In its Asia Pacific Economic Preview for this week, the financial intelligence company said “the near-term prospects remain worrisome for the Philippines as it copes with an intensifying virus outbreak that shows no signs of abating.”
The government imposed quarantine measures since mid-March 2020 to help contain the spread of coronavirus disease (Covid-19) infections.
However, cases registered a surge in the past few days, with the record-high number posted on March 20 at 7,999.
The report said government spending in the Philippines “has been more conservative relative to its Southeast Asian counterparts” but added “the scope to deliver through a more expansionary monetary stance is relatively limited at this stage.”
“We expect that the central bank will opt to preserve ammunition for now and stall a rate cut until the next quarter if the domestic situation deteriorates,” it added. (PNA)