Finance Secretary Ralph G. Recto has formally assumed the role of the government's representative to the Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP).

On Monday, Jan. 22, Recto, who recently took on the position of finance secretary, was sworn in by BSP Governor Eli M. Remolona as the seventh member of the central bank's policy-setting board.

Recto will represent President Ferdinand Marcos Jr.'s cabinet on the MB.

With Recto’s inclusion, the MB consists of Remolona as chairman, along with members V. Bruce Tolentino, Anita Linda Aquino, Romeo Bernardo, Rosalia de Leon, and former finance secretary Benjamin Diokno.

Recto’s appointment is to the seven-member body is crucial as the BSP maintains its tight monetary policy stance in response to inflation concerns, despite a moderation in consumer price growth. 

The BSP has raised its key interest rate by 450 basis points since May 2022, bringing it to a near 17-year high of 6.5 percent to tame inflation.

In 2023, the average inflation rate remained at 6.0 percent, significantly exceeding the central bank's target range of two percent to four percent.

The Monetary Board holds a lot of power as it is responsible for making decisions about how the BSP operates and supervising the financial system. 

Its main function is to make sure that prices remain stable by targeting inflation and taking actions related to monetary policy.