MANILA - The commitment to “significantly raise global growth” and to create an environment of “carefully calibrated and clearly communicated” monetary policy forged by the different finance ministers and central bank governors across the world will be good for the Philippines growth story, the Bangko Sentral ng Pilipinas (BSP) governor said.
BSP Governor Amando M. Tetangco Jr. told reporters that although there were no specific steps mentioned, the Group of 20’s (G-20) commitment to pursue growth would be positive for the Philippines.
Tetangco said it was “imperative” for the Philippines to keep the local stability of the economy.
“In particular, continue reform to enhance productivity, improve investment environment, spend on appropriate infrastructure. For the BSP, we will continue to focus on our mandate of price stability so that growth can happen in a low and stable inflation environment,” he said.
The G-20 is an international organization with 20 member-countries providing a forum for finance ministers and central bank governors to discuss strategies on international economic cooperation. The organization concluded its annual meeting in Sydney, Australia, earlier this week.
The meeting, in which Tetangco was present as the official representative of the Philippines, resulted in a commitment to pursue policies to increase their growth by about 2 percent over the next five years.
Tetangco said this commitment is seen to be beneficial for our local expansion rate and financial markets.
“As they say, the tide should lift all boats,” he said.
In its communiqué published in G-20’s official web site, the organization agreed to push global growth higher and to pursue monetary policies that are appropriate to accommodate the growth of their economies.
“All our central banks maintain their commitment that monetary-policy settings will continue to be carefully calibrated and clearly communicated, in the context of ongoing exchange of information and being mindful of impacts on the global economy,” the communiqué on the meeting read.
“We will also continue to be watchful of potential sources of volatility in financial markets during this transition. The G-20 statement included a show of commitment from the AEs to “carefully calibrate and clearly communicate” monetary-policy settings. This should be market positive, including for EMEs. That said, it shouldn’t be a license for liberal market-risk taking,” Tetangco said.
As such, Tetangco said markets should distinguish between economies that have sound macroeconomic fundamentals and those that have lagged in maintaining stability in their economy.