NextGen Day

The Bangko Sentral ng Pilipinas (BSP) is expected to maintain unchanged policy rates at the Monetary Board’s (MB) rate-setting meeting on Thursday, September 20, 2021, according to Moody’s Analytics.

The financial and economic research and a non-credit activity-focused subsidiary of Moody’s Corporation said in its Asia Pacific economic preview released on Monday that its no rate change expectations for the BSP are similar to its forecasts for the Bank of Japan (BOC) and Bank Indonesia rate decisions this week.

“For the rest of 2022, each central bank is projected to maintain policy settings on hold, with policy settings firmly in accommodating territory in all cases,” it added.

To assist cushion the domestic economy from the pandemic’s effect, the BSP’s policy-making MB lowered the central bank’s main policy rates by a total of 200 basis points in 2020.

It also lowered banks’ reserve requirement ratios (RRRs) by up to 200 basis points and enabled banks to use lending to micro, small, and medium-sized businesses (MSMEs) as RRR compliance for a limited time.

Both policies are designed to guarantee that financial institutions have more liquidity to lend to borrowers, thus ensuring that economic activity remains stable.

The BSP’s policy stance would remain accommodating to assist the revival of the domestic economy, according to monetary officials.

In the second quarter of 2021, the Philippine economy expanded by 11.8 percent, reversing a five-quarter decline that began in the first quarter of last year.

Economic officials are hopeful about the domestic economy’s long-term recovery, noting signs of improvement in sectors like exports and imports.

Both the Philippines and Indonesia, according to Moody’s Analytics study, “continue to face internal illness outbreaks that have interrupted their respective recoveries.”

Last September, the number of daily coronavirus disease 2019 (Covid-19) infections in the Philippines surpassed 20,000, owing primarily to the Delta variant.

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