BSP likely to maintain rates as remittances stay robust — HSBC report

The Bangko Sentral ng Pilipinas will probably keep key rates at their present level as remittance inflows continue to be strong, the HSBC said in its recent report. "The BSP is unlikely to cut rates at its first meeting of the year. Even if inflows are strong and monetary officials are displeased, other administrative measures will likely be considered before the BSP cuts rates. Therefore, we expect rates to stay on hold at 3.5 percent," said the report. The HSB also expects steady remittance inflows for 2013. "With global conditions likely to improve, backed by a China recovery, we expect remittances to be robust in 2013," it said. Furthermore, “with fiscal easing in Japan and data pointing to improved domestic demand in the US, remittance growth could surprise on the upside," the report also said. For January to November 2012, remittances rose 6 percent year-on-year to $19.4 billion. "Looking ahead, we expect inflows in December to accelerate due to improved economic conditions in host countries," the report said. The HSBC also expects a credit rating upgrade for the Philippines to investment grade in the second half of the year. — BM, GMA News