UPDATE 1-Philippine cbank vows to retain policy support for economy ahead of meeting

* C.bank expected to keep rates steady at record low on
Thursday
* Says watchful of second-round pressures on inflation
* Says 'heavy lifting' for economy must come from fiscal
side

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MANILA, March 24 (Reuters) - The Philippine central bank has
the scope to maintain monetary policy support for the country's
economy, but is on guard against "second-round effects" that
could push inflation higher, its governor said on Wednesday.
In remarks ahead of the central bank's policy meeting on
Thursday, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin
Diokno said the inflation environment remained manageable, and
that a recent uptick is transitory.
Headline inflation in February hit a 26-month high outside
the central bank's 2%-4% target mainly due to higher food
prices. Despite inflationary pressures, all 13 economists Reuters
surveyed predicted the BSP will keep its benchmark overnight
reverse repurchase facility rate PHCBIR=ECI at a record low of
2.0% for a third straight meeting on Thursday. "The BSP remains ready to respond to second-round effects
such as increased calls for wage and transport fare hikes and
elevated inflation expectations," Diokno said.
"Thus far, demand-side pressures remain muted."
While the BSP has room to "preserve" monetary policy support
for the economy, Diokno warned that a resurgence of COVID-19
infections could further dampen domestic demand and overall
business and consumer confidence.
The government has reimposed stricter rules on movements in
the capital Manila and nearby provinces as daily coronavirus
cases hit a record high on Monday, threatening hopes for an
economic rebound after last year's record contraction.
With the BSP's support limited by high inflation, Diokno
said "the heavy lifting should come from fiscal and health
authorities".