MANILA -- (UPDATE) Inflation accelerated past estimates in January while staying within the Bangko Sentral ng Pilipinas' target, official data released Wednesday showed, putting pressure on monetary authority to cut interest rates, according to analysts.
The consumer price index rose 2.9 percent in January from 2.5 percent in the previous month. It was faster than the median forecast of 2.7 percent based on a Bloomberg poll of economists. The central bank's think tank predicted 2.5 to 3.3 percent.
The BSP set a 2 to 4 percent target for the full year. It will hold its first interest rate-setting meeting for 2020 on Thursday. Seventeen of 24 economists polled by Bloomberg predicted a rate cut.
"It is within the target of the BSP but it seems to imply that the window for rate cuts is narrowing very fast," BPI lead economist Jun Neri told Market Edge on ANC.
"We believe there is still some room. Later on, that will narrow and might actually close. Therefore, we think the BSP might do a one-and-done cut by tomorrow to 3.75 percent," he said.
ING Bank economist Nicholas Antonio Mapa also predicted a 25-basis point cut on Thursday.
Bangko Sentral Governor Benjamin Diokno said the Monetary Board would " consider all the latest developments" in its policy decision on Thursday.
Diokno earlier signaled a cumulative 50-basis point cut in the benchmark lending rate this year. He said on Jan. 27 that while there was "a lot of room" to ease policy, he would "go easy" on unwinding the full 175-basis point interest rate hikes from 2018. The BSP cut the benchmark by 75 basis points in 2019.