MANILA – The Bangko Sentral ng Pilipinas (BSP) vowed to support the national government's fiscal intervention to soften the impact of global events on the local economy.
This, as the country's inflation is expected to quicken due to disruptions in global trade and soaring oil prices amid the ongoing Russia-Ukraine conflict.
In a statement Friday, the central bank said the ongoing conflict will push upward pressures on key international commodity prices, particularly oil and wheat.
Industry data showed that Dubai crude traded from USD110 to a little over USD122 per barrel this week, while wheat prices increased by 60 percent in the global mart.
The central bank added that the Ukraine-Russia war could slow down global trade and investments, with uncertainties spilling over into financial markets due to higher volatility and weaker market confidence.
“In this regard, the BSP supports the National Government’s initiatives to implement appropriate fiscal interventions to cushion the economy from increased upside risks to inflation and to safeguard the momentum of economic recovery,” it said.
The BSP said the social protection programs such as fuel subsidies for public transport drivers as well as the agriculture and fisheries sectors could help reduce the impacts of rising pump prices, which already rallied for 10 straight weeks.
On Thursday, the Department of Budget and Management (DBM) said it just released PHP3 billion -- PHP2.5 billion for the public transport sector and PHP500 million for farmers and fisherfolk -- worth of fuel subsidy. Some 377,443 beneficiaries are eligible for the fuel subsidy.
Efforts to ensure a stable supply of commodities also cushion the impact on inflation.
The central bank likewise supports further easing of restrictions to promote economic activities and raise market confidence.
“The BSP remains focused on preserving monetary policy support as sustaining the economic recovery remains a priority. At the same time, the BSP stands ready to respond to potential second-round effects arising from elevated inflation pressures that can disanchor inflation expectations, in keeping with our price and financial stability mandates,” it said. (PNA)
