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the central bank remains hesitant to commence tightening its policy. Thus, we still expect<br />

the central bank to wait until the inflation numbers in February are locked in before raising<br />

its interest rates in March,” Ms. Victorino said.<br />

Analysts also expect a later date for any cuts to bank reserves amid abundant money<br />

supply.<br />

“Given the price pressures ahead, the BSP might hold off any immediate reduction in the<br />

reserve requirement ratio (RRR) until it gets a better sense of the actual impact of the<br />

TRAIN law. Reducing the RRR now is unwise since it could introduce added inflation<br />

uncertainty,” said Guian Angelo S. Dumalagan, market economist at Land Bank of the<br />

Philippines.<br />

Noelan Arbis of HSBC Global Research, however, said the RRR may be trimmed to 19% to<br />

manage liquidity levels, ahead of a 25bp cut in borrowing rates some time next quarter.

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