By Lee C. Chipongian
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said he will commit to being more pro-growth to ensure both financial and economic stability and to sustain growth for the long term.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno. (Bloomberg)
“(The) BSP is committed to playing an even more active role in maintaining economic stability and in helping achieve the economy’s long-term development goals, among which is to reach high-income status by 2040,” Diokno told participants of a forum hosted by The Asian Banker.
The amended BSP Charter expanded on its mandate of price and financial stability. Diokno said they will maximize the “provisions of our newly amended Charter, which enhances the BSP’s ability to manage liquidity and supervise the financial sector together with other financial regulators.”
Since Diokno assumed BSP chief position last March, the Monetary Board has reduced interest rates by 75 basis points (bps) to encourage domestic growth and also cut banks’ reserve requirement ratio by 200 bps end-July and by another 100 bps next month in the hope that the fresh liquidity will increase lending to productive sectors.
He reiterated that the Philippines is among the fastest growing and most resilient economies in the world and that it “is in a very nice place right now” with a manageable inflation and hefty reserves.
The GDP grew by 6.2 percent in 2018 and he expects growth to remain in the six-percent level this year “before accelerating further over the next three years.”
“When I say the BSP is committed to playing a more active role in helping achieve the economy’s development goals, what I mean is we are doing tasks outside the traditional central banking function of maintaining price and financial stability,” said Diokno. “We want to contribute more to poverty reduction. This will make the BSP more relevant and closer to the Filipino people — something I consider to be my personal mission.”
The digitization of financial services is changing the way the BSP, known globally as a leader in financial inclusion (FI) agenda, is expanding and improving FI initiatives. The local banking system has become more streamlined, financially inclusive and technologically responsive. Financial technology has been particularly helpful in expanding FI.