BANGKO Sentral ng Pilipinas (BSP) governor Benjamin Diokno said the country’s employment numbers continue to be one of the crucial factors being assessed when crafting monetary policy response and timing, especially during the pandemic.
In a message to reporters following the release of the country’s July employment data this week, Diokno said the Labor Force Survey shows that the country’s recovery is still shaky, thus still potentially needing sustained accommodative monetary policy in the short term.
“Results of the July 2021 Labor Force Survey indicate two things. First, as shown by the drop in the unemployment rate to its lowest level since the onset of the pandemic, the Philippine economy continues to progress in its economic recovery process,” Diokno said.
“Second, with the increase in the underemployment rate and drop in the labor force participation rate compared with the previous month’s figures, the recovery process comes with short-term challenges,” he added.
Preliminary results of the Labor Force Survey released by the Philippine Statistics Authority (PSA) said there were 3.1 million unemployed and 8.7 million underemployed Filipinos during the month.
Diokno said it is crucial for the country to recover positively in terms of employment rate before they start considering winding up their accommodative monetary policy.
“The BSP has done a lot to support the economy amid the crisis.… The BSP will continue to support the economy for as long as necessary, until we see evidence of robust and sustained economic recovery, as reflected partly in the employment situation,” the Central Bank chief said.
At the height of the pandemic, the BSP cut its interest rates to a historic low of 2 percent. The BSP also implemented other monetary measures which, in total, infused over P2.2 trillion of liquidity in the economy’s stream.
“We are committed to help the Philippines build on its nascent economic recovery, toward a better post-Covid-19 economy. This is consistent with the BSP’ primary objective of maintaining price stability conducive to a balanced and sustainable growth of the economy and employment,” Diokno said.
Read full article on BusinessMirror