BSP to remain watchful of economic dev’ts

MANILA, Philippines - Following the strong economic growth announced yesterday, the Bangko Sentral ng Pilipinas said it will remain watchful of developments and deploy the necessary policy measures to ensure inflation stays  anchored.

 “BSP will continue to monitor developments and will make further adjustments, as necessary, to help keep inflation within the government’s target range over the policy horizon,” BSP Governor Amando M. Tetangco Jr. said in a text message to reporters.

He made the comment following the Philippine Statistics Authority’s announcement that the economy grew by 6.4 percent in the second quarter.

 “The robust second quarter growth, despite strong base effect, shows the county’s continued resiliency. It likewise backs the BSP’s view that the economy has the capacity to absorb the recent adjustments in policy settings,” Tetangco said.

In the first half of the year, the economy grew by six percent, below the government’s 6.5- to 7.5-percent target for the year.

The BSP expects inflation to settle within three to five percent this year.

Last month, monetary authorities hiked key policy rates by 25 basis points each to ensure inflation expectations especially for 2015 remain anchored. The BSP earlier also increased the reserve requirement ratios of banks and the special deposit account interest rate to rein in the high liquidity growth.

BSP Deputy Governor Diwa C. Guinigundo, meanwhile, said the Philippine economy has become more resilient against shocks following structural reforms through the years.

 “This better than expected growth outturn confirms our view that the Philippine economy has gone through significant structural change in the last few years due to long years of policy reforms,” Guinigundo said.

 “As a result, the economy has become more resilient. Potential capacity has risen due to efficiency and productivity gains,” he continued.

 “Most important, from a monetary perspective, the economy remains resilient to undergo appropriate policy adjustment to ensure sustainable economic growth,” Guinigundo said.