RP shows signs of economic recovery – BSP

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) said there are already signs of economic recovery, indicating that demand for Philippine exports would soon pick up.

BSP Governor Amando M. Tetangco Jr. said that as the economy recovers, the BSP would continue to assess the global environment to ensure that its monetary settings will continue to support growth.

“We need to continue to monitor deve-lopments. Things change and there’s always an evolution of developments. We have to take these into account on a regular basis. At this point, the settings are appropriate,” Tetangco told reporters yesterday.

Last Aug. 20, the central bank decided to keep policy rates steady after cutting rates by as much as 200 basis points since December 2008. The overnight borrowing rate is currently at four percent while the overnight lending rate is at six percent.

“At the last meeting, the Monetary Board decided to hold. The assessment then was, given the forecast for inflation as well as signs for improving economic performance, the stance of monetary is appropriately accommodative,” Tetangco said.

The BSP chief added that with signs of economic recovery on the horizon, monetary authorities would make sure that the central bank’s inflation forecast remains on track with respect to inflation target.

The central bank has a target range of 2.5 percent to 4.5 percent for the year. In August, inflation hit a fresh 22-year low of 0.1 percent on the back of slower increases in the prices of fuel, light and water.

At the same time, Tetangco said the BSP would make sure that there is enough liquidity in the financial system so that there would be adequate financing for productive purposes.

“It is also important that the different sectors continue to take advantage of opportunities, like the business process outsourcing (BPO) sector. Remittances are also still growing despite the crisis. These types of activity would help generate consumer demand which can help push the economy,” Tetangco said. –Iris C. Gonzales (The Philippine Star)