The Philippines: BSP to carefully assess timing of unwinding its easing measures

  • THE central bank will carefully gauge the appropriate timing of unwinding its aggressive policy measures, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.
  • “With the huge amount of liquidity injected into the system, we are fully aware of the need to carefully assess the appropriate timing of the unwinding of all these measures,” Mr. Diokno said in a credit rating call with Moody’s Investors Service.
  • In 2020, the central bank slashed benchmark rates by 175 basis points (bps) to aid the economy amid the coronavirus disease 2019 (COVID-19) pandemic. This has reduced the reverse repurchase, lending, and deposit facilities to record lows of 2.25%, 2.75% and 1.75%, respectively.
  • Reserve requirements for big banks were also trimmed by 200 bps while those for smaller banks were reduced by 100 bps.
  • The central bank’s policy moves have already provided liquidity support worth PHP1.9tr or equivalent to 9.6% of the country’s gross domestic product, Mr. Diokno said.

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