BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno reiterated his stance to maintain monetary policy rates at accommodative levels to ensure the recovery of the local economy.
The Central Bank chief said the BSP is “resolute” to stay the course amid the persistence of Covid-19 cases in the country. He also said the BSP will maintain its accommodative stance for “as long as necessary,” to sustain economic recovery.
In 2020, the BSP reduced the country’s policy rate by a cumulative 200 basis points to bring its main policy rate to an all-time low. The BSP maintained this all throughout 2021 amid the rising trend of inflation.
The governor said that keeping monetary policy steady is necessary as, while there are signs of growth, risks to recovery still loom from restrictions due to the spread of the Covid Delta variant.
“The Philippines has sustained its position compared with rating peers because of the strengthening of its fiscal metrics ahead of the pandemic shock. Nevertheless, the country’s road to recovery will not be easy,” the governor said in a recent speaking engagement.
“We will continue to monitor recent developments, here and abroad, and assess their impact on the inflation outlook, financial stability and growth,” he added.
Diokno also said that while they will do all they can to hold the fort on the monetary front, the key to a sustained economic rebound is the acceleration of the government’s vaccination program.
The governor added that sustained targeted fiscal initiatives and monetary policy support for domestic demand would help boost market confidence and economic recovery to gain more traction.
“The BSP is committed to support the economy for as long as needed to ensure its strong and sustainable recovery. The BSP will also remain vigilant against any emerging risks to the outlook for inflation and growth and will adjust its policy settings as needed to safeguard its price and financial stability objectives,” Diokno said.
Image courtesy of Nonie Reyes