PHL Ready to Support Growth Amid Global Trade Shocks – BSP

The Philippines is in a strong position to sustain economic growth despite ongoing global trade disruptions, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Zeno Ronald R. Abenoja said during a joint policy forum with the Philippine Institute for Development Studies (PIDS).

Speaking on behalf of BSP Governor Eli M. Remolona Jr. at the forum held May 26 at the BSP Head Office, Abenoja underscored that the country’s manageable inflation rate of 1.4% as of April 2025 creates room for monetary easing to support domestic expansion.

“Low inflation gives us extra degrees of freedom to ease monetary policy and support growth,” Governor Remolona said in the speech delivered by Abenoja.

He warned that trade shocks—such as those driven by rising protectionism and volatile tariffs—can be more damaging than supply disruptions, potentially eroding decades of economic gains if not addressed.

The forum, titled “Seizing the Shift: Navigating Trump’s Reciprocal Tariffs,” examined the effects of renewed U.S. tariff hikes under President Donald Trump’s second term, and how these policies are reshaping global trade flows.

Key BSP officials including Monetary Board Members Romeo L. Bernardo and Jose L. Querubin, and Assistant Governor Maria Margarita D. Gonzales also participated in the event.

The discussions centered on identifying vulnerable sectors, maximizing the Philippines’ comparative advantages, and crafting policy strategies to better integrate into shifting global value chains.

Abenoja emphasized the need for coordinated policy efforts between fiscal, trade, and monetary authorities to protect key industries and capitalize on emerging opportunities.

As the U.S. and other advanced economies move toward more inward-looking trade policies, developing countries like the Philippines are urged to recalibrate their trade and industrial strategies to remain competitive.

The forum also examined the role of innovation, supply chain diversification, and regional trade agreements in insulating the Philippine economy from external shocks.

The BSP said it will continue to closely monitor global trade dynamics and inflation trends, ensuring monetary policy remains agile and responsive to both domestic and international developments.

The BSP’s ability to potentially cut interest rates, given the low inflation environment, provides a buffer that could boost investment and consumption if trade tensions escalate further.