Bangko Sentral ng Pilipinas (BSP), which is widely targeting inflation, is expected to keep core interest rates stable this year as the threat of soaring consumer prices amid a unsettling economic recovery.Due to food shortages caused by typhoons affecting agricultural output, damage caused by African swine fever, and steadily rising global energy prices, ING economist Nicholas Mapa expects inflation in The country's January will be 3.8 percent, the BSP's 4 percent top inflation target may be under threat as early as April or May, he added.

Mapa also slotxo expects the economy to remain in recession in this first quarter until a fundamental impact increase in gross domestic product (GDP) occurs in the second quarter of 2021. By 2020, Philippine GDP shrank 8.3 percent last year. This was the first recession seen by the county since 1998, and the decline was the highest in recent history.The complicated issue for this challenging year is the return of BSP's nemesis to inflation, which will reduce the remaining purchasing power to little for already challenging households. Despite the accelerating factor of GDP, the Philippine economy is still in a fragile state of recovery, with quarter-to-quarter growth expected to slow at a time when the rapid accelerating price spikes will make The year 2021 was even more challenging, ”Mapa said in the research note.

The BSP is likely to refrain from any recent policy rate adjustments in the near term as it works with the Fiscal Authority to eliminate this impending inflation while maintaining support. As much as it can be gathered to support recovery, ”he added.Emilioneri Jr., an economist at the Bank of the Philippine Islands, said GDP is likely to continue to contract, although it was mild in the first quarter. But assuming the government does not impose further blocking measures, he said double-digit growth may be possible in some quarters of 2021, bringing full-year growth of 6.8 percent. It could return to 2019 levels, and a full recovery could only happen in 2022.On the other hand, uncertainty persists and another disruption could render the economy inaccessible. Growing more than 6 percent, ”he said.

Domestic bond yields will remain low for the foreseeable term due to BSP funding, however, Neri cites the high risk associated with inflation and exchange rates, which prevents BSP from taking action. Reduce policy interest rates and generate income from debt in the near term. Disruptions in supply and ongoing livestock outbreaks have raised food prices. Prices remain vulnerable to freight hikes, trade restrictions and inclement weather, ”he said.In a separate research note, British banking giant HSBC also said it did not expect further policy rate cuts from the BSP, despite the risk of a slow recovery this year. It said inflation had moved in the past two months and was vulnerable to breaching the BSP's 2-4 percent target range for the next quarter. INQ.