The Bangko Sentral ng Pilipinas (BSP) is not in a rush to tweak its monetary policy, especially with the imminent implementation of the new rate corridor. There has been some chatter about the BSP introducing new guidelines for the special deposit account (SDA), presumably in a bid to better manage liquidity in the system. At this juncture, however, the BSP is expected to keep its key policy rate unchanged. 

The 4Q15 GDP data out late last month would encourage the central bank. That domestic demand remains robust means there is room for the BSP to tighten its monetary policy stance further if there is a need to. Some overheating concerns may resurface in light of the 14% investment growth seen last year. At the same time, however, CPI inflation remains below the 2-4% target. And low crude oil prices mean CPI inflation may remain low for longer than expected. 

"1Q16 numbers will be crucial. As we have noted previously, we see some upside risks to our 6.1% GDP growth forecast for this year. With domestic demand staying robust and continuing to support the overall GDP growth outlook, we reckon that the BSP may raise its policy rate again in 2H15 especially since CPI inflation is likely to return to the target range", notes DBS Group Research.