BSP underscores need for capital market development during Philippine economic briefing

Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. today said the development and the deepening of the Philippine capital markets are vital to the economy.

"Hand in hand with the government, we are pushing on multiple fronts to deepen our capital markets. Such deepened markets will enhance our transmission mechanisms for monetary policy and make our financial system more resilient," the Governor explained in a video message shown at the Philippine Economic Briefing (PEB) held 27 May at the Philippine International Convention Center.

Deepening the country's capital market also diversifies funding sources for investments, businesses, and the economy, he added.

In the same event, the Governor shared that the BSP is taming inflation: "We faced unusual supply shocks, which have been large and relentless. From a peak of 8.7 percent in January 2023, inflation has since been on a general downtrend, with the latest rate as of April 2024 at 3.8 percent, within the government's target range. "

The Governor also reported that, "Our banks are well capitalized and flushed with liquidity. They are in a good position to continue to support growth."

He added that the BSP continues to take proactive steps to digitalize in general and improve our payments and settlements system in particular, helping big investors, small businesses, and Filipino families with increasingly digitalized transactions.

Governor Remolona underscored that the PEB's 'PH On-the-Go: Fast-Tracking Economic Progress' theme reflects the country's economic growth, it is not just a cliché. The country's economic growth is projected to be 6.0 to 7.0 percent this year. "Progress is not about growth. We want this growth to improve the lives of most of our people," he added.

BSP Senior Assistant Governor (SAG) Iluminada T. Sicat joined the panel discussion on "Shaping a Macroeconomic Landscape Conducive for Investments" with Finance Secretary Ralph G. Recto, Budget Secretary Amenah F. Pangandaman, Socio-Economic Planning Secretary Arsenio M. Balisacan, and International Monetary Fund Resident Representative to the Philippines, Ragnar Gudmundsson.

According to SAG Sicat, the BSP sees inflation reverting to the target range after an expected rise in May to July. "At end of the year, based on our risk-based adjusted outlook, we foresee inflation to revert back to within the target range," she said.

Also present at the PEB were Presidential Adviser for Investment and Economic Affairs Frederick D. Go, Trade Secretary Alfredo E. Pascual, Public Works Secretary Manuel M. Bonoan, Transportation Secretary Jaime J. Bautista, Agriculture Undersecretary Asis G. Perez, Information and Communications Technology Undersecretary Jeffrey Ian C. Dy, Energy Assistant Secretary Mario C. Marasigan, and Private Sector Advisory Council member and Ayala Corporation Inc. Independent Director Rizalina Mantaring.