Phl stands to benefit from G20 commitment

MANILA, Philippines - The Philippines stands to benefit from G20’s commitment to pursue economic growth, the Bangko Sentral ng Pilipinas (BSP) said yesterday.

“Although there were no specific steps mentioned, the G20’s commitment to pursue growth should be positive for the Philippines,” BSP Governor Amando M. Tetangco Jr., said following the statement issued by the Group of 20 finance ministers and central bank governors.

“As they say, the tide should lift all boats. In the meantime, it is imperative that we keep our own house in order,” Tetangco said.

“In particular, continue our reform to enhance productivity, improve investment environment, spend on appropriate infrastructure,” he added.

The G20 is composed of the world’s major economies including the US, Germany, United Kingdom, Japan, and China.

The group earlier this week welcomed signs of rosy prospects for the global economy as growth in the US, UK and Japan gain traction alongside continued expansion in China and emerging market economies.

“For BSP, we will continue to focus on our mandate of price stability, so that growth can happen in a low and stable inflation environment,” Tetangco said.

The Philippine economy expanded by 7.2 percent last year, matched by a well-anchored inflation that averaged three percent.

The government hopes to grow the economy by 6.5 to 7.5 percent this year, while the central bank has an inflation target range of three to five percent.

“We will also continue to be watchful of potential sources of volatility in financial markets during this transition,” Tetangco said.

“The G-20 statement included a show of commitment from the AEs (advanced economies) to ‘carefully calibrate and clearly communicate’ monetary policy settings. This should be market positive, including for EMEs (emerging market and economies),” he continued.

The start of the year was marked with volatility in global financial markets following the US Federal Reserve’s reduction in monthly asset purchases.

Increased volatility started pestering markets since May last year, when the Fed hinted it may scale back its stimulus amid an improving US economy.

“That said, it shouldn’t be license for liberal market-risk taking,” Tetangco said.

“Markets should distinguish between economies that have kept their houses in order and those that have lagged in this respect,” he added.