Central bank ready against potential shocks in PH economy

The Bangko Sentral ng Pilipinas (BSP) is “well-placed” to deal potential shocks which could threaten the Philippine economy this year, its chief said.

BSP Governor Nestor Espenilla Jr., said in a speech during the Rotary Club meeting on December 4 that the institution has to have the characteristics of “strength, resilience and the capability to innovate” in order to brace challenges in 2018.

“At the BSP, we try very hard to be pro-active. We carefully survey the landscape for potential threats. We ensure that our tools to deal with them remain sharp. We strive to stay on top of developments, and to always be prepared, so that we can address risks appropriately and in a timely manner,” he said.

Espenilla stressed the BSP remains aggressive to equipping the local economy with foundations necessary to withstand risks.

“While the coming year is likely to bring continued challenges for the Philippines, we are well-placed to deal with these challenges. The country’s firm growth momentum and manageable inflation environment provide ample space to respond appropriately to evolving domestic and global conditions,” he added.

Meanwhile, data from the central bank showed gross domestic product (GDP) in the quarter of 2017 was 6.9 percent, an inch higher than the recorded 6.7 percent recorded in the second quarter of the same year.

It noted this brings the average growth to 6.7 percent for the first nine months of 2017.

BSP also said it expects the inflation to be still within 2 to 4 percent target range between 2017 and 2020.

Moreover, Espenilla stressed 2017 saw strong momentum in global economic growth, leading central banks across the world to revert to more neutral positions.

For local economy, he said BSP will heighten the resiliency of domestic economy this year as it plans to roll out, together with other government agencies, industry associations and market participants, the initiatives of the Philippine local currency debt market development roadmap.

Under this roadmap are the launch of the enhanced government securities eligible dealers program to support secondary market liquidity, enhancement in financial market infrastructure, among others.

Espenilla said the BSP has “remained vigilant and proactive as we launch new and ambitious reform initiatives.”

“These provide the solid foundation for confidence in our prospects for 2018 and beyond,” he said.