BSP to remain 'patient' but says COVID-19 still threat to growth outlook

ABS-CBN News

Posted at Nov 16 2021 11:50 AM

MANILA - The central bank will remain patient when it comes to raising interest rates "for a few more quarters," Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Tuesday.

The country has "hefty" gross internal reserves which are even higher compared to its total foreign debt, Diokno told ANC.

"I’ve seen many crisis in the past and I’m very comfortable where we are. We have hefty gross international reserves and a steady inflow of foreign exchange," Diokno said. 

"Given what we have deployed, we feel that this is sufficient for the time being so no need for additional monetary action," he added.

However, Diokno said the COVID-19 pandemic remains a "threat."

"The threat still is COVID. COVID-19 could re-emerge, that’s the most serious threat to our forecast," he said.

The BSP is also monitoring employment despite the rate being higher compared to its pre-pandemic level. Some sectors are also lagging behind in terms of recovery, he said. 

"The immediate question mark at this point is the employment situation. While the jobs market has actually gone up, in fact employment right now is higher than pre-pandemic level, we continue to monitor the quality of jobs," he said.

The Asian Development Bank earlier warned that although employment numbers were improving, jobs generated are of lower quality. 

The BSP has 2 more monetary policy-setting meetings for the remainder of the year. 

Diokno over the weekend said the economic growth forecast of 5 to 6 percent is "attainable" after the gross domestic product grew 7.1 percent in the third quarter.