THE CENTRAL BANK will ensure abundant liquidity and stability of the banking system through its policy actions, an official said.
“On the monetary policy side, we have to hold on tight. We need to make sure liquidity continues and the banking system is safe,” Currency Board member V. Bruce J. Tolentino said at a conference during the virtual signing of a memorandum of understanding for a research partnership between Bangko Sentral ng Pilipinas (BSP), Ateneo de Manila University and University of the Philippines Diliman.
He said the central bank would also look for ways to address supply issues that have caused high inflation.
Last year’s inflation averaged 4.5%, higher than 2020’s 2.6% and above the central bank’s 2-4% target.
For 2022 and 2023, the central bank expects inflation to remain within target at 3.4% and 3.2%, respectively.
The BSP kept benchmark interest rates at record highs in 2021, citing the need to support the economy amid novel coronavirus disease 2019 variants.
BSP Governor Benjamin E. Diokno said he was unlikely to adjust borrowing costs in the first half as he wanted to see at least four to six consecutive quarters of growth before any policy changes.
The Monetary Council will conduct its first policy review for this year on February 17.
Amid an ongoing shortage of pork, Mr Tolentino said they support a permanent drop in tariffs for these products to help bring prices down. Last year, the government temporarily increased the pork import quota to deal with low supply that led to higher meat prices, which was in effect until the end of 2021.
“There is now reason to make these price reductions permanent as well as the increase in the minimum volume of access. Indeed, Filipinos need the food they need at a lower cost so that the cost of living is well managed,” he said.
“To extend this or make it permanent requires another executive order or legislation. I hope that such legislation will be enacted, especially for livestock, through the new Livestock Bill which is currently under consideration,” Tolentino added. — LWTN