Inflation continues to decrease in the Philippines. In January, the inflation rate was at 2.8 percent, the lowest it has been in three years. This is the second time in a row that inflation stayed within the two to four percent target set by the Bangko Sentral ng Pilipinas (BSP). The BSP has warned that inflation could temporarily rise in the second quarter of the year due to the impacts of El Niño weather conditions and positive base effects. Despite the decrease in inflation, the BSP is expected to keep policy settings tight. Monetary authorities are expected to review the latest inflation and gross domestic product (GDP) outturns on February 15. The governor of the BSP has also mentioned the possibility of another rate hike. Despite the decrease in inflation, ING senior economist Nicholas Mapa says the BSP is expected to retain its hawkish stance. HSBC economist for ASEAN, Aris Dacanay, expects the BSP to maintain its monetary stance and rates.
