{"id":121773,"date":"2017-10-06T01:38:30","date_gmt":"2017-10-06T05:38:30","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=121773"},"modified":"2017-10-06T01:38:30","modified_gmt":"2017-10-06T05:38:30","slug":"analysts-eye-hikes-in-bsp-rates-in-q4","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2017\/10\/06\/analysts-eye-hikes-in-bsp-rates-in-q4\/","title":{"rendered":"Analysts eye hikes in BSP rates in Q4"},"content":{"rendered":"
\"(Pixabay<\/a>
Core inflation, which excludes volatile items food and oil, also rose to 3.3 percent from three percent due to across-the-board increases in sub-indices, with alcoholic beverages and tobacco rising by 6.4 percent. (Pixabay photo)<\/figcaption><\/figure>\n

MANILA, — Rate of price increases in the Philippines posted a five-month high of 3.4 percent last September, firming up analysts\u2019 projections for a central bank rate hike starting in the last quarter of 2017.<\/p>\n

In a research note, ING Bank Manila senior economist Joey Cuyegkeng said the uptick of inflation from last August\u2019s 3.1 percent was an \u201cupside surprise\u201d since market expectations were for a flat inflation rate.<\/p>\n

\u201cImpact of four weather disturbances was worse than expected and drove higher food prices,\u2019 he said.<\/p>\n

These weather disturbances include typhoons \u201cKiko\u201d, \u201cMaring\u201d, \u201cNando\u201d and \u201cOdette\u201d.<\/p>\n

Core inflation, which excludes volatile items food and oil, also rose to 3.3 percent from three percent due to across-the-board increases in sub-indices, with alcoholic beverages and tobacco rising by 6.4 percent.<\/p>\n

With the unexpected rise of inflation last September, Cuyegkeng adjusted upwards his inflation forecast for 2017 from 3.1 percent to 3.2 percent, which is similar to the latest Bangko Sentral ng Pilipinas\u2019 (BSP) forecast for this year until 2019.<\/p>\n

\u201cThe risk remains on the upside, in our view. We have retained our 3.5 percent inflation forecast for 2018 and 2019,\u201d Cuyegkeng said.<\/p>\n

With the upside adjustment in ING\u2019s inflation forecast, Cuyegkeng believes that a \u201cpre-emptive tightening\u201d of rate is possible during the December meeting of the central bank\u2019s policy-making Monetary Board (MB).<\/p>\n

\u201cThis would also address the need to possibly re-anchor inflation expectations while preserving interest rate differentials (in the wake of a likely Fed rate hike),\u201d he added.<\/p>\n

To date, the central bank\u2019s reverse repurchase (RRP) rate is three percent;\u00a0 repurchase (RP) rate at 3.5 percent;\u00a0 and 2.5 percent for special deposit account (SDA).<\/p>\n

ANZ Research, in a study issued Thursday, said the higher-than-expected inflation rate last September gives the central bank reason to implement rate hikes, which it forecasts to be a total of 50 basis points in the first quarter of 2018.<\/p>\n

It said uptick, particularly in core inflation, shows that \u201cdemand pull pressures are intensifying.\u201d<\/p>\n

\u201cOn top of the rise in fuel costs and the expected knock on effect of the tax reform, the government recently approved taxi fare hikes which will take effect as soon as all taxi meters have transitioned to the new fare formula,\u201d it said.<\/p>\n

ANZ Research also cited the \u201ccombined imbalances of elevated credit growth, excessive activity in real estate, and deterioration in the current account are deepening.\u201d<\/p>\n

\u201cOverall, this strengthens the case for a tighter monetary policy and our conviction around policy rate hikes of 50bps (cumulative) in Q1 2018,\u201d it added.<\/p>\n","protected":false},"excerpt":{"rendered":"

MANILA, — Rate of price increases in the Philippines posted a five-month high of 3.4 percent last September, firming up …<\/p>\n","protected":false},"author":33,"featured_media":121774,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[26258,14146,10587],"class_list":["post-121773","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-higher-food-prices","tag-ing-bank-manila","tag-joey-cuyegkeng","mauthors-joann-villanueva","mauthors-philippine-news-agency"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/121773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=121773"}],"version-history":[{"count":0,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/121773\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/121774"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=121773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=121773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=121773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}