The Bangko Sentral ng Pilipinas is keen on maintaining its policy support to sustain economic recovery from the impact of the global health crisis, Governor Benjamin Diokno said.
“The BSP’s accommodative monetary policy and extraordinary measures ensured adequate liquidity in the financial system that accelerated domestic economic activity amid the pandemic,” Diokno said in a presentation during the recent J.P. Morgan Philippine Conference 2022.
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.
The gross domestic product grew by 7.7 percent in the fourth quarte, resulting in a 5.6-percent full-year growth in 2021.
This exceeded the government’s most recent projection of 5.0 percent to 5.5 percent for the year and partially offset the 9.6-percent contraction in 2020, the worst GDP performance since World War 2.
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, within the government’s official target range of 2 percent to 4 percent.
“Meanwhile, the current level of gross international reserves, which stood at $109 billion, is more than sufficient to withstand adverse external shocks,” Diokno said.
The country’s external payments position could also be further strengthened by structural flows from overseas Filipino remittances and foreign direct investments, he said. Julito G. Rada
He said the BSP’s market-determined exchange rate system and macro-prudential measures would 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,” Diokno said.