BSP: Pandemic exit strategy timing uncertain

BSP Governor Benjamin Diokno stated on Thursday that unwinding pandemic monetary policy interventions requires proper timing and remains uncertain for the Philippines.

Diokno cited experiences from recent crises, noting that reducing monetary support is a step before raising interest rates.

He emphasized the continued threat of further COVID-19 infections as a downside risk to growth and inflation in the coming months.

The BSP has cut key policy rates by 200 basis points in 2020 and reduced banks' reserve requirement ratios (RRR) up to 200 basis points, among other measures.

Diokno highlighted that the withdrawal of pandemic-focused policies will depend on medium-term inflation and growth outlooks, as well as risks around these outlooks.

He stressed the importance of balancing adequate economic stimulus with preventing inflationary pressures and financial stability risks.