BSP may cut interest rates to boost economy — analysts

Two European banks, both citing low inflation and macroeconomic growth factors, said the policy-making Monetary Board of the Bangko Sentral ng Pilipinas may trim its policy interest rates by a fourth of a percent in its first meeting for 2012 on Thursday.   "We continue to expect a 25 basis point rate cut this quarter, with a good chance that it comes as early as the January 19 meeting," Credit Suisse research analyst Santitarn Sathirathai said in an Asian market monitoring report.   In its “Philippines Central Bank Watch” note, Hong Kong and Shanghai Banking Corp. economist Trinh Nguyen said that with inflation projected to slide in the next several months “we expect the BSP to cut rates by 25 basis points this Thursday, but to hold them steady thereafter at 4.25 percent for the rest of 2012 due to excess liquidity conditions."   Sathirathai said the BSP intention may be to help spur growth considering how the country’s gross domestic product slipped in 2011 and factoring the effect of weak demand for exports.   Nguyen said that “with inflationary pressures set to stay low for the foreseeable future, a rate cut will likely do less harm, than good."   "The next monetary board meeting after this Thursday’s meeting is not until March, by which time the worst of the slowdown in the West may have passed," she added. — ELR, GMA News