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ING: Faster Inflation + Robust GDP = BSP Hike?

PHILIPPINES

ING note that “with faster inflation expected to persist for at least the rest of the year, we expect BSP (Bangko Sentral NG Pilipinas) to join the rate hike club with an adjustment before the end of this quarter. BSP Governor, Benjamin Diokno, has been hesitant to increase policy rates in the past, expressing his preference to retain monetary support for the economic recovery. However, with Q1 GDP growth expected to be robust and confirming that growth momentum is intact, we expect BSP to finally move rates higher. A GDP growth rate of over 6% on top of the above-target inflation rate should be enough to prod BSP to hike rates as early as the 19 May policy meeting.“

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ING note that “with faster inflation expected to persist for at least the rest of the year, we expect BSP (Bangko Sentral NG Pilipinas) to join the rate hike club with an adjustment before the end of this quarter. BSP Governor, Benjamin Diokno, has been hesitant to increase policy rates in the past, expressing his preference to retain monetary support for the economic recovery. However, with Q1 GDP growth expected to be robust and confirming that growth momentum is intact, we expect BSP to finally move rates higher. A GDP growth rate of over 6% on top of the above-target inflation rate should be enough to prod BSP to hike rates as early as the 19 May policy meeting.“