THE Bangko Sentral ng Pilipinas (BSP) believes the creation of the Interagency Committee (IAC) on Inflation and Market Outlook (IMO) can help address the supply-side issues of rising commodity prices.
BSP Governor Felipe M. Medalla told BusinessMirror that monetary policy has its limits and one of them is “curing” supply-side concerns that affect inflation.
The lack of efforts to address supply-side concerns has already been cited by economists, who noted that the BSP had been doing the heavy lifting even as far back as December in terms of addressing inflation. (Related story: https://businessmirror.com.ph/2022/12/07/inflation-easing-plan-lacking-its-8-in-november/)
“This is okay [creation of IAC-IMO]. After all, the problems that have to be addressed are on the supply side, which can’t be cured by exchange rate and monetary policy,” Medalla told this newspaper.
The National Economic and Development Authority (Neda) also clarified that the IAC-IMO will not be placed under the Neda Board. The IAC will be under the newly formed Econ Development Group (EDG).
The findings and recommendations of the IAC will also be presented to the EDG, which will make recommendations to the President. The EDG will also have Neda as its Secretariat.
The Terms of Reference (TOR) on the IAC-IMO will be drafted by Neda and the Department of Finance. The TOR will contain the IAC’s structure and functions.
Neda and DOF will cochair the IAC-IMO, while the Department of Budget and Management will be the vice chairperson.
The IAC will also include the Department of Agriculture, Department of Trade and Industry, Department of Energy, Department of Science and Technology, and Department of the Interior and Local Government.
The Philippine Statistics Authority, BSP, and Philippine Competition Commission will serve as the committee’s resource institutions.
The EDG, which will also be cochaired by Neda and DOF, will assist the Executive Department in harmonizing, coordinating, complementing and synergizing the efforts that will ensure the country’s rapid, inclusive and sustained growth.
Its members are the heads of the Presidential Management Staff, Department of Trade and Industry, Department of Budget and Management, Department of Agriculture, Department of Public Works and Highways, Department of Transportation, Department of Information and Communications Technology, and Department of Energy.
The list of members will also include the Department of Science and Technology, Department of Tourism, Department of the Interior and Local Government, and Department of Labor and Employment.
The EDG may also “request the participation of the Governor of the Bangko Sentral ng Pilipinas, as well as of other officials of relevant government agencies, as is deemed necessary.”