Analysts expect BSP to hold policy rate at 5% amid inflation concerns

Most analysts polled by BusinessWorld anticipate the Bangko Sentral ng Pilipinas (BSP) will maintain its policy interest rate at 5% during its upcoming Monetary Board meeting on October 9, citing persistent inflation risks.

Ten out of sixteen analysts surveyed expect the BSP to pause its monetary easing cycle, which has seen rates lowered by 150 basis points since August last year.

However, six analysts predict a 25-basis-point rate cut, arguing that inflation remains below the target and economic growth needs support.

Philippine headline inflation accelerated to 1.7% in September from 1.5% in August, the government reported on Tuesday.

This was below the median estimate of 1.9% in a BusinessWorld poll and within the central bank's 1.5-2.3% forecast.

While inflation was below expectations, some analysts believe the BSP may pause its easing cycle this week to assess the overall economic picture, with potential cuts possibly occurring in December or next year.

Risks to the country's growth outlook due to the fragile global environment could lead to a cut at the Monetary Board's December meeting.