The central bank’s policy-making body, the Monetary Board, will not raise the key overnight rate on September 21 amid new developments such as the possible impact of a rice price cap on inflation.
The decision is “a tough call” for the inflation-targeting BSP. I Photo: Bangsamoro Autonomous Region in Muslim Mindanao
This was pointed out in the latest HSBC Global Research commentary of the British bank as it insisted that the Bangko Sentral ng Pilipinas (BSP) will keep its policy rate unchanged at 6.25% in the next policy meeting.
However, it admitted that this decision is “a tough call” for the inflation-targeting BSP, especially with higher August inflation and the possible second-round impact of a temporary price ceiling on rice.
According to HSBC economist Aris Dacanay, "After six months of straight deceleration, the August inflation print was a setback to the Philippines' inflation narrative and will likely complicate the BSP's monetary policy decision on September 21."