The monetary authorities on Thursday posed no objection to fiscal intervention programs the government adopted in recent days in the wake of the Ukraine-Russia crisis.
But Bangko Sentral ng Pilipinas Governor Benjamin E Diokno acknowledged the continued hostilities and the measures adopted to help government limit their impact present upside risks to inflation and on local output growth measured as the gross domestic product (GDP).
“We expect the ongoing crisis to continue to exert upward pressure on key international commodity prices, particularly oil and wheat,” Diokno said.
This was the reason the BSP supports the adoption of fiscal intervention programs such as the P2.5 billion Pantawid Pasada program and another P500 million fuel discount scheme that President Duterte approved just days earlier.
According to Diokno, these timely social protection measures “could help alleviate the impact of rising crude oil prices in the transportation and agriculture sectors, while sustained efforts to ensure adequate domestic food supply could mitigate further supply-side pressures on inflation.”
Efforts further easing restrictions in a safe and deliberate manner could also help in improving confidence and reinvigoration of economic activities, he added.
But Diokno’s greater worry centers on the clouding of global trade and investments “as uncertainty spills over into the financial markets through higher volatility and weaker market sentiments.”
Also on Thursday, the Japanese Ambassador to the Philippines Kazuhiko Koshikawa expressed great concerns over Russai’s aggression against Ukraine, particularly its impact “on the already impeded progress on the political and economic situation of the world.”
His government, he said, has already sanctioned Russia.