Growth Now More Prominent Concern for Monetary Policy, Says Tetangco

Article excerpt

MANILA, Philippines - Bangko Sentral ng Pilipinas Governor Amando Tetangco said yesterday that economic growth is now a "more prominent concern" in determining the central bank's monetary policy.

"In the near term, the current growing consensus is that economic policy is now less focused on inflation. Growth has become the more prominent concern," Tetangco said at a news forum.

Tetangco said inflation remains manageable, and the central bank is looking at an inflation target of 3%-5% this year, "barring surprises from oil price volatility."

The governor said the central bank has room to respond to further slowdowns in economic growth amid the uncertain global economic environment.

"Unlike in other countries, the BSP policy rates are not near zero. The BSP's enhanced policy toolkit is deep and the BSP has not yet exhausted its options in dealing with inflation pressures, pressures on exchange rates and pressures on banking system soundness," he said.

Tetangco also said the country's economic growth rate could hit the lower end of the government's 5%-6% target for this year, adding private consumption will continue to drive growth this year.

He said the economy is faced with three major overseas risks, namely - the unresolved European debt crisis, the weak US labor market and the likely slowdown in China "which could result in the loss of critical driver of growth not only in the region, but also globally. …