Experts: BSP can keep rates at April meeting

THE Philippines's central bank is unlikely to respond right away to recent oil price shocks, likely keeping interest rates unchanged at the upcoming April 23 policy meeting while it gauges how oil price spikes feed into transport, electricity, and food distribution, according to experts.

- BY ANDREA E. SAN JUAN

In a message sent to the Business Mirror, Philippine Institute for Development Studies (PIDS) Senior Research Fellow John Paolo Rivera said the Bangko Sentral ng Pilipinas (BSP) still has room to keep rates unchanged in April, thanks to the latest inflation print which has stayed within the central bank's target band.

"February inflation at 2.4 percent remains within the 2-4 percent target and the BSP has already shifted to a more cautious, risk-management stance as its easing cycle nears the end," Rivera told this newspaper.

"The next MB policy meeting is on April 23 so a pause would be consistent with a wait-andsee approach while the BSP assesses oil, peso, and external risks," he also pointed out.

Ateneo De Manila University (ADMU) Department of Economics Associate Professor Luis F. Dumlao explained to the Business Mirror that "Monetary policy can tame demand-driven inflation, but ill advised to tame supply shock-driven inflation."

"Since the present inflation is supply shock-driven, policy can only tame inflation at the risk of slowing growth or even causing recession," added Dumlao.