THE Bangko Sentral ng Pilipinas (BSP) is likely to retain its policy rate at its March meeting after inflation eased, although strong economic performance could lead to policy normalization sooner rather than later, Moody’s Analytics said.

In a note on Monday, Moody’s said the BSP still has leeway to keep rates on hold after inflation eased to 3% in February.

“The central bank is keeping a close watch on inflation expectations,” Moody’s said.

“Russia’s invasion of Ukraine has heightened upside risks from high global energy and food prices. Monetary policy is expected to start normalizing in the September quarter.”

The BSP is likely to keep rates steady at its March 24 meeting, according to 15 out of 17 analysts polled by BusinessWorld. The central bank is expected to maintain its support for the economic recovery despite inflationary pressures caused by the war.

Oil prices have been volatile since Russia, a top exporter of crude oil, invaded Ukraine in February.

Although the Asia-Pacific is not experiencing the same rate of price growth seen in North America and Europe due to the war, Moody’s Analytics in a separate note said the region can expect rising producer and consumer prices in the second quarter.

Noting strong economic performance in parts of the Asia-Pacific, Moody’s said central banks in the region could start policy normalization soon.

“Taiwan joins South Korea, Singapore and New Zealand on the road toward policy normalization,” the research firm said.

“The next may be the Philippines, where recent economic performance has been very strong.”

The BSP’s next policy review after Thursday is on May 19. — Jenina P. Ibañez