Bangko Sentral to review econ indicators this week

Philippine monetary authorities this week will review how the country’s 7.3-percent economic growth in the first quarter will impact on inflation, and the global economic recovery on commodity prices. “As you know we are going to have our policy meeting this week and among the factors we are going to consider in the assessment is the higher than expected growth for the first quarter of 2010, Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr. said Monday “We'd like to look at this in terms of the possible impact on inflation together with other factors like the global economic growth as well as movement in international commodity prices," Tetangco said at the sidelines of the 57th Annual Convention of the Rural Bankers Association, held at the Sofitel Hotel in Pasay City. “We want to take a look at the domestic growth in the context of what is happening also in the global economy and how this will affect commodity prices worldwide. This is something that we see as important and is going to be a part of the assessment," Tetangco said. He said inflation would remain within the programmed range of 3.5 percent to 5.5 percent this year and from 3 percent to 5 percent next year. “But this forecast will have to be reviewed and that is what we will do this week. The review will look at the impact of growth on prices, as well as the effects of global developments including the debt problems in Europe and the behavior of internal commodity prices on global growth," he said. Meanwhile, analysts at First Metro Investments Corp. and at the University of Asia and the Pacific expect the BSP to defer making monetary policy adjustments in the third quarter of the year, saying the government will likely make the adjustments in the fourth quarter. Delaying the adjustments implies market confidence in the existing policy framework. In February monetary authorities in Taiwan adjusted by 25 basis points the island nation’s policy rates. India made the same adjustments in March, and Malaysia followed this month. (A basis point is equal to 0.01 percent.) The BSP borrows from banks at 4 percent, and lends at 6 percent, based on policy rates adopted in July 2009. Those rates were so far appropriate, but may not be so at this point given developments in the local and global markets in recent months, Tetangco said. —VS, GMANews.TV