BSP Governor Benjamin Diokno (file photo)
MANILA – The Bangko Sentral ng Pilipinas (BSP) stands ready to deploy appropriate monetary policy tools necessary to safeguard price and financial stability goals, BSP Governor Benjamin Diokno said.
“In any case, the BSP remains vigilant of evolving global and domestic price conditions…,” he said in a virtual briefing on Friday.
Diokno said he believes the current uptick in global commodity prices is transitory given the revival of demand as economies recover from the pandemic.
He said that while fluctuations in global commodity prices impact on domestic inflation rate, the central bank is closely monitoring and assessing this to prevent any signs of second-round effects from supply-side inflation.
On Thursday, the BSP’s policy-making Monetary Board (MB) hiked the central bank’s average inflation forecasts by one percentage point for each year from 2021 until 2023 at 4.1 percent, 3.1 percent and 3.1 percent, respectively.
Diokno attributed the adjustment to hikes in food and energy items in the global market.
For one, Dubai crude oil prices remain high due to expected recovery in global economic activities even as members of the Organization of Petroleum Exporting Countries (OPEC) and its allies agreed to lower production cuts.
With inflation still high and growth remaining fragile, Diokno said “the BSP stands ready to maintain its accommodative monetary policy stance for as long as necessary to support the economy’s recovery amid the adverse impact of the Covid-19 pandemic. “
“The BSP is likewise prepared to utilize the available policy space to ensure that monetary policy settings are in line with sustainable recovery of the economy, consistent with its price and financial stability mandates,” he added. (PNA)
