The Bangko Sentral ng Pilipinas is seen to keep its key policy rates unchanged today, according to HSBC.
“After beginning the year with bold policy changes, we expect the central bank to keep rates on hold at the upcoming monetary meeting,” the HSBC Global Research said in its latest research note.
On its last meeting, the Monetary Board kept the interest rates for the overnight
borrowing or reverse repurchase facility at 3.5 percent, while overnight lending or repurchase was kept at 5.5 percent. The reserve requirement ratios were held steady as well.
It has also kept the interest rates on the special deposit accounts (SDA) at 2 percent. It also reduced the SDA rate three times since January by a total of 150 basis points.
The board is also scheduled to announce its latest monetary policy stance today.
Meanwhile, HSBC cited the Monetary Board’s decision to restrict SDA placements of trust department/entities.
The new rules stipulates that investment management accounts (IMA) shall be reduced by at least 30 percent by July 30, while any remaining balance shall be phased out by November 30, 2013.
“Most notable was the decision to ban nonpooled trust accounts by January 2014, of which 30 percent must liquidate the facility by the end of this month, and 100 percent by the end of November,” it stated.
HSBC added that the effect of such policy adjustments, including the slashing of SDA rate from 3.5 percent to 2 percent are “gradually being felt.”
It noted that the SDA facility declined form a peak of P1.9 trillion in February to P1.7 trillion in June.
“We expect at least half of the total amount to liquidate the facility by the end of November 2013,” it said.