Philippines Can Continue Easy Monetary Policy, Diokno Says

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The Philippine central bank can keep its accommodative monetary policy stance, Governor Benjamin Diokno said Sunday, ahead of the Nov. 18 policy rate meeting.

Inflation is easing and economic output is rising faster than expected, with this year’s GDP growth likely to exceed targets, Diokno said in a mobile-phone message to reporters. He also sees the peso appreciating as overseas Filipino workers send money home ahead of the holidays.

“The BSP may continue to be patient and continue its accommodative monetary policy stance given the current domestic, external and financial developments,” Diokno said.

Other Highlights

• Central bank expects inflation to average 4.3% this year, 3.3% in 2022 and 3.2% in 2023: Diokno
• The Philippine situation is a “sharp contrast” to the inflationary pressures in developed countries like the U.S. and Europe, which are due to supply-chain bottlenecks and rising labor costs: Diokno
• There is little likelihood of a wage hike, Diokno said, citing “sufficient slack” in the labor market and higher participation rate; there also appears to be no pressure on real estate prices
• GDP growth targets for 2022 and 2023 look doable, suggesting that the country’s real output will revert to pre-pandemic by the third quarter of 2022: Diokno
• The Philippine central bank kept its key interest rate at 2% for a seventh straight meeting on Sept. 23
• Philippine Household Spending Accelerates Economic Recovery

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