Philippines: BSP likely to hike by 50bps – TDS

Analysts at TD Securities expect BSP to hike by 50bps, as does the market in its policy meeting today.

Key Quotes

“BSP governor Espenilla has stated a few times that he is considering “strong” monetary adjustment at this meeting, highlighting elevated CPI and increased inflation expectations amid wage and fare increases.”

“Ahead of the meeting July CPI is likely to reveal a further increase, to around 5.3% y/y, which would mark the fifth month that inflation is above target. Although officials have seemed less concerned with PHP weakness, there is likely to be a desire to maintain financial stability and limit capital outflows via a further rate hike.”