Monetary authorities have the policy space to respond to the external and domestic headwinds facing the Philippine economy this year, the Bangko Sentral ng Pilipinas (BSP) chief said on Tuesday.
“We have the policy space to respond to uncertainties … We will therefore make adjustments in the stance of policy as conditions warrant,” central bank Governor Amando Tetangco Jr., said in his keynote speech during The Manila Times 3rd Business Forum.
Factors spurring the uncertainties, he said, include the slowing Chinese economy, the speed and magnitude of the US Federal Reserve’s planned rate hikes and low global oil prices. Domestically, these involve the prolonged El Niño weather pattern, which has hit the agriculture sector significantly and threatens prices, and the existence of infrastructure gaps.
The central bank, Tetangco said, has been responding to these challenges through a wide range of policy actions, reforms and formulations.
These include maintaining the appropriate monetary policy; early adoption of Basel III Framework; strengthening banks’ risk management; reforms anchored on financial stability; consultation with stakeholders in preparation for Association of Southeast Asian Nations economic integration; fine-tuning of models, systems and indices; the scheduled implementation of the interest rate corridor; monitoring of the inflation process; and a market-determined foreign exchange policy. MAYVELIN U. CARABALLO