BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno told reporters they are monitoring wage dynamics in the country and how it could impact inflation.
In a briefing on Thursday, Diokno said they continue to be” vigilant” on the evolving wage dynamics and its ability to influence the growth of prices. He also vowed that the BSP will continue to actively participate in discussions on wage policies.
“The pandemic has had a large impact on the labor market landscape, such as the reduced face-to-face interactions in industries coupled with the rise of digitalization and automation of jobs around the world…. As many studies have noted, changes in labor market outcomes are likely to influence productivity and wage adjustments,” Diokno said.
“At the BSP, the monetary policy assessment takes into account conditions in domestic demand and the labor sector. For instance, labor market conditions in terms of employment growth as well as minimum wage adjustments are considered as determinants of possible demand-driven price pressures in the domestic economy,” Diokno said.
Just recently, the Asian Development Bank (ADB) said the pandemic reversed many of the gains in employment in the country, wiping out 1.7-million wage and salary jobs in 12 months as of January 2021.
As such, ADB said the global best practices such as wage and hiring subsidies as well as unemployment insurance should be applied in the country to address labor market concerns in the post-pandemic world.
Diokno also expressed support to the swift distribution of the social welfare assistance to alleviate the immediate labor disruptions caused by the pandemic.
“The BSP is of the view that enabling policies catered on promoting a long-term, sustainable, and inclusive economic growth and productive employment are critical as we exit the pandemic,” Diokno said.
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