We had penciled in a 25bps hike each in 3Q17and 4Q17, but are now pushing itout to 1Q18and 2Q18given recent rhetoric from policymakers. The currency hasbeen under pressure with the current account balance and overall balance-ofpaymentsfalling into deficit amid easy fiscal policy and PHP has underperformedother AxJ currencies. In this context, Philippines' foreign reserves accumulationhas been more subdued compared to other Asian economies. However, recentcomments by policymakers suggest that they are not overly concerned aboutrecent currency trends, thereby limiting the likelihood of rate hikes in the nearterm.Moreover, policymakers have commented that they will act if the economyis showing signs of overheating but they believe that the economy is not thereyet. Policymakers expect inflation, fiscal balance and current account balance toremain manageable.    We see a gap between what BSP would do (delay rate hikes for now) vs whatwe think they should do (pre-emptive tightening)…: At this stage, we agree thatit's difficult to argue the economy is in overheated territory. Overall indebtednessremains low despite strong credit growth. Despite moving into negative territory,the current account deficit is very mild and is funded by rising FDI on the otherside. Meanwhile, the fact that the savings-investment gap is caused by higherinvestment more so than higher consumption also mitigates the likelihood ofresource misallocation.

声明：如本站内容不慎侵犯了您的权益，请联系邮箱：wangshiyuan@epins.cn 我们将迅速删除。