As expected, the Philippines’ central bank (BSP) kept its key policy rate on hold at 4.0% today. The upswing will probably stay strong while inflation risks will climb next year. But currency appreciation is doing much of the heavily-lifting in terms of monetary tightening while the issue of how to sensibly cope with high capital inflows still has far to run. We have revised our view and now anticipate that the BSP will delay a policy rate hike until Q1 2011.