The Bangko Sentral ng Pilipinas (BSP) pushes strategies to nip inflation by pushing buttons to increase the supply of food commodities while addressing supply-side pressures. Briefly, BSP calls for a “whole-of-government approach” as a shield for the vulnerable sectors economy impacted by high prices of commodities. With this as a strategy, the national government shall mitigate the supply-side of high prices through improved farm production and addressing bottle-necks for key food items. The BSP’s monetary policy acts in tandem with the fiscal policy and programs to prevent prolonged inflation effect.
BSP’s latest data assessment shows inflation to average 5.6 percent for 2022 and 4.1 percent in 2023, before easing back to within the target range at 3.0 instead of 3.1 in 2014. Pressures from the supply-side and the on-going Russian and Ukraine attribute to the inflation occurring globally.
The Philippine currency has depreciated by as much as 15.7 percent to hit new record lows in 2022 from 50.999 to $1 in late 2021. The central bank is committed to maintain the double-barreled response of raising interest rates by 50 to 75 basis points and intervening in the foreign exchange market to stabilize the peso addressing the volatility in the market amid the aggressive rate hikes of the US Federal Reserve.
I accept the BSP’s challenge to the country’s economic team on the need to tame inflation by improving/increasing farm productivity (a PBBM battle-cry), and addressing bottle-necks for key food to mitigate the supply-side pressures.
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