20/04/2019
Interest Rate to remain unchanged, easing monetary policy unlikely, citing average inflation for the first quarter is at 3.8% , which is at a higher bracket of the target of two-four percent.
Relevance to investors : Lower interest rates drives stock prices higher.
175 basis points was raised by the BSP in year 2018 to control inflation which peaked at 6.7% in September and October 2018.
BSP also sees no need to expand money supply (monetary easing) as measured by M3. Although M3 increased at a slower pace in 2018 at 9% however, M3-to-GDP ratio is at 67%, compared to 60% M3-to-GDP ratio (lower) in year 2013 where M3 increased at a faster pace which is 32%.
M3 (Money supply) includes items in M1 and M2, plus (1) Large Deposits, (2) Institution Money Market Funds, (3) Other Large Liquid Assets. M2 comprise items in M1 plus (4) Savings Account, (5) Money Market Funds, (6) Time Deposits not more than P5M. M1 comprises (7) Cash in circulation & (8) Demand Deposits.
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Analysts told: Review data more carefully - business.mb.com.ph
business.mb.com.ph/2019/04/19/analysts-told-review-data
Shared by Benson Lim, Unit Head and Financial Advisor of AXA Philippines housed in AXA Center, Regional Office , Escario Street, Cebu City
