BSP keen to maintain policy support to economy

The Bangko Sentral ng Pilipinas (BSP) is keen on maintaining its policy support to sustain economic recovery.

“The BSP’s accommodative monetary policy and extraordinary measures ensured adequate liquidity in the financial system that accelerated domestic economic activity amid the pandemic,” BSP Governor Benjamin E. Diokno said during the recent J.P. Morgan Philippine Conference 2022.

To date, the BSP’s liquidity-easing measures in response to the pandemic amounted to P2.3 trillion, equivalent to about 12.03 percent of gross domestic product (GDP).

The latest GDP data indicate that the economy grew by 7.7 percent in the fourth quarter of 2021, resulting in a 5.6 percent full-year growth in 2021.

This exceeds the government’s most recent projection of between 5.0 and 5.5 percent and reversing the recession posted in 2020.

Based on the BSP’s latest inflation baseline forecasts, inflation is projected to settle at 3.4 percent in 2022 and 3.2 percent in 2023, which is well within the government’s official target range of 2.0 to 4.0 percent.

Meanwhile, the current level of gross international reserves, which stood at USD109 billion, is more than sufficient to withstand adverse external shocks.

The country’s external payments position can also be further strengthened by structural flows from overseas Filipino remittances and foreign direct investments.

Moreover, the BSP’s market-determined exchange rate system and macroprudential measures will continue to help manage excessive foreign exchange volatility and maintain order in financial markets.

“The BSP remains steadfast in striking a balance between providing adequate stimulus to the economy and preventing build-up of inflationary pressures and risks to price and financial stability,” the Governor added. (BSP)