MANILA - The Philippine central bank is likely to keep its key policy rate steady for a sixth meeting in a row on Thursday, as the country's growth story remains intact despite a recent sell-off that hammered Asian markets.
All 11 economists surveyed by Reuters forecast the central bank would also vote to hold the rate on its short-term special deposit account window.
A hold in the special discount account (SDA) facility would let the central bank review the impact of previous cuts and a move in May to ban certain types of trust funds from placing money there.
Last week, Governor Amando Tetangco said there was no urgency to change the central bank's monetary policy because inflation remained under control.
The key policy rate has been at 3.5 percent since October, when it was cut by 25 basis point.
"The Philippines is actually one of the better placed among Southeast Asian economies to deal with volatility in portfolio flows," said Eugene Leow, economist at DBS in Singapore.
"Growth and inflation dynamics remain favorable and there is no impetus for the central bank to stimulate growth or to curtail inflationary pressures," Leow said.
The Southeast Asian nation's prospects remain bright, according to economists and investors, thanks to solid government finances, a steady deluge of cash sent home by citizens working overseas and lower exposure than its neighbors to slumping global trade.
Unlike its neighbor Indonesia, which hiked rates by twice as much as expected this month, to stem outflows and combat inflation, the Philippines is widely seen standing pat on rates for the rest of the year as it is expected to remain in a sweet spot of low inflation and strong growth.
Annual inflation averaged 2.9 percent in the first six months of the year, and economists in a Reuters quarterly poll in July forecast it would be 3.1 percent for the full year, comfortably within the central bank's 3-5 percent target band despite expectations of strong growth.
The Philippines posted surprisingly strong first-quarter growth of 7.8 percent, prompting economists in the same quarterly poll to raise their full-year growth forecast to 6.8 percent from 5.9 percent in an April poll.
Economists believe strong domestic demand and higher government spending will compensate for weak exports.