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Faced by hard decisions that will affect price stability, the Bangko
Sentral ng Pilipinas (BSP) may seek the opinion and environmental
assessment of multilateral organizations such as the International
Monetary Fund (IMF) on monetary policies aimed at easing
inflationary pressures.
“Consistency in environmental assessment and
policy advice from international organizations like the IMF would be
crucial,” BSP Gov. Amando Tetangco Jr. said in reference to
central bank’s plan of action to ensure price stability.
The multilateral lender earlier said the
Philippines, together with Vietnam and Indonesia, may be behind the
curve in interest rate policy.
The governor hinted that the country’s strong
domestic growth could absorb further increase in interest rates.
“The Monetary Board is ready to undertake
further action as necessary to ensure the achievement of BSP’s
price stability objective,“ Tetangco said.
The Asian Development Bank earlier said rising
inflation coupled with slowing economies posed a policy dilemma
that, if dealt with properly, could lift the risk of hard landings
for many Asian countries.
“The environment we are in also continues to
evolve. This is a dilemma faced by all practitioners of monetary
policy, specifically those who are on the ground and making the hard
decisions everyday,” Tetangco said.
He said strong domestic consumption also fuels
inflation besides higher oil and commodity prices.
“The current outlook on the buoyancy of
domestic demand gives us room for a measured policy response, he
said.
The Monetary Board raised its key policy rates
by 25 basis points, with overnight borrowing and lending rates at
5.25 percent and 7.25 percent, respectively.
The move was in response to MB’s assessment
that there are already early signs of supply-driven pressures
feeding into demand, Tetangco said.
The BSP also raised its inflation forecast
between 7 percent and 9 percent this year and 4 percent to 6 percent
next year driven by higher oil and commodity prices.
-- Maricel E. Burgonio
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