The Philippines: BSP to ensure sustainable recovery before tightening

  • THE BANGKO SENTRAL ng Pilipinas (BSP) may consider hiking its key interest rate in Jun 22 if economic growth and employment data show recovery is now entrenched, its governor said.
  • “We really have to balance whether the recovery that we are seeing is sustainable. That’s why we are going to wait for the GDP (gross domestic product) number for 1Q22,” BSP Governor Benjamin E. Diokno said when asked by ABS-CBN News Channel.
  • “By Jun 22, we’ll also have more data on employment, whether employment continues to improve, and so forth, and if those things suggest that the recovery is sustainable, maybe we will act accordingly under these cases,” he added.
  • The Philippine Statistics Authority will release 1Q22 GDP data on 12 May 22, while the Labour Force Survey for Mar 22 and Apr 22 will be out on 6 May 22 and 10 Jun 22, respectively.
  • Meanwhile, Mr. Diokno said the pilot launch of the wholesale central bank digital currency (CBDC) is planned within 4Q22.
  • “We are going to do this on experimental basis, which will start in the fourth quarter of this year. We will experiment with some large financial institutions, limited in the Philippines,” he said.
  • Mr. Diokno said several banks have expressed intention to participate in the pilot program. The BSP is still open to accept those who want to join the pilot run.

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