MANILA - The Bangko Sentral ng Pilipinas may raise its benchmark interest rate on Wednesday, the second increase this year, to address rising consumer prices, an analyst said.
The BSP raised the overnight borrowing rate by 25 basis points during its last policy meeting on May 10, the first adjustment since September 2014 after inflation in April breached its 4-percent ceiling.
A third rate increase is possible within the year, said Standard Chartered economist Chidu Narayanan.
"We think the BSP is still reluctant to hike rates, particularly because they see inflationary pressures as transitory and it wouldn't be sticky enough to be a consistent worry," Narayanan told ANC's Market Edge.
"But we think it is a little more sticky than what the central bank anticipates at this point in time," he added.
The peso's weakness against the dollar will likely persist due to "very high" growth in imports, he said.
The peso is likely to settle at P50 to P51 to the dollar by the end of the year, he said.