New York-based Moody’s Analytics expects the Bangko Sentral ng Pilipinas (BSP) to stand pat at this week’s policy meeting, despite a slightly worsening inflation outlook following the March price uptick.

Analysts at Moody’s Analytics wrote in a commentary last Friday, April 17, that Philippine monetary authorities, “which announced an off-cycle hold decision a few weeks ago, are unlikely to change course at their scheduled April meeting, despite a March inflation spike muddying the outlook.” The BSP’s Monetary Board (MB) will next decide on the monetary policy stance this coming Thursday, April 23.

March inflation clocked in at 4.1 percent, surpassing the BSP’s target ceiling of four percent as global energy shocks rapidly filtered through domestic retail prices. The central bank signaled it will tighten the monetary belt should second-round effects begin to materialize.

Last month, the policy-setting MB held a rare off-cycle meeting to respond to the domestic spillovers of the United States (US)-Iran war, which was at its peak at the time. Still, the MB decided to keep the benchmark rate steady at 4.25 percent, citing well-anchored inflation expectations.

Well-anchored inflation expectations suggest that the public and the market still believe the inflation rate will settle back to normal levels once the war dust settles.

Singapore-based United Overseas Bank Ltd. (UOB) likewise priced in a pause, arguing that the BSP would still consider inflation pressures, which remain driven by the supply side of global shocks.

“We think the BSP may look through supply-driven inflation pressures and keep the policy rate unchanged at 4.25 percent on Thursday, amid persistent uncertainty surrounding the Middle East conflict,” UOB’s Global Economics & Markets Research wrote in an April 20 commentary.

According to the Singaporean lender, the monetary authorities are “likely to remain vigilant on potential second-round effects while assessing the pace of recovery in domestic demand.”

These votes for a hold add to the four analysts anticipating a similar move, as upward adjustments to key borrowing costs would do little to address supply-driven shocks and could instead derail growth.

Meanwhile, five others expect a quarter-point hike to the benchmark rate, arguing that the BSP must act to curb accelerating consumer prices and ease pressure on the peso, which has faced volatility amid geopolitical conflict.