{"id":136968,"date":"2017-12-07T00:23:16","date_gmt":"2017-12-07T05:23:16","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=136968"},"modified":"2017-12-07T00:23:16","modified_gmt":"2017-12-07T05:23:16","slug":"bsp-chief-likens-economy-to-a-race-car-discounts-over-heating","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2017\/12\/07\/bsp-chief-likens-economy-to-a-race-car-discounts-over-heating\/","title":{"rendered":"BSP chief likens economy to a race car; discounts over-heating"},"content":{"rendered":"
\"In<\/a>
In a WhatsApp message to reporters, the central bank chief said that \u201coverheating happens when the present demands on the economy significantly exceeds its present capacity to provide.\u201d
(Photo By Bangko Sentral ng Pilipinas – http:\/\/www.bsp.gov.ph\/images\/espenilla.jpg, CC BY-SA 4.0)<\/a><\/figcaption><\/figure>\n

MANILA – -The\u00a0 total picture of the economy , whether its overheating or not,\u00a0 cannot be discerned\u00a0 only through credit growth.<\/p>\n

This was stressed by Bangko Sentral ng Pilipinas (BSP) Governor Nestor\u00a0 Espenilla Jr. on Wednesday following rising concerns that the Philippine economy is starting to show signs of overheating.<\/p>\n

In a WhatsApp message to reporters, the central bank chief said that \u201coverheating happens when the present demands on the economy significantly exceeds its present capacity to provide.\u201d<\/p>\n

This is \u201ceasy to say but always hard to discern since our economy is complex, with many moving parts,\u201d he said.<\/p>\n

He said \u201cthe economic machine itself is constantly being improved through good investments\u201d and is always \u201csubjected to outside shocks\u201d thus, \u201cone cannot jump to a conclusion just by looking at one or two bits of information.\u201d<\/p>\n

Espenilla said BSP officials \u201chave to strategically examine a whole lot of information to tell us how the overall economy is doing and, no less important, how should we respond if at all.\u201d<\/p>\n

\u201cI can tell you that BSP spends a lot of time understanding the economy at any given point of time, developing a dynamic game plan, and executing effectively. So the economy doesn’t overheat! And we do this systematically and regularly. Every six weeks,\u201d he added.<\/p>\n

The central bank chief was referring to the regular assessment and rate-setting meet of the BSP\u2019s policy-making Monetary Board (MB).<\/p>\n

Espenilla said the Board had a two-stage evaluation process, Stage 1 of which involves the analytical assessment using data from the central bank\u2019s Economic Research, Market Operations, as well as Supervision and Payments divisions.<\/p>\n

He said the \u201cFormal Management discussion, to firm up an evaluation and recommendation to the MB, takes about three hours.\u201d<\/p>\n

\u201cBut those three hours are backed up by hundreds of man-hours of focused research,\u201d
\nhe said.<\/p>\n

Stage two of the rate setting meet is the MB meeting, which for this December has been set on December 13, the eight meeting for this year.<\/p>\n

Espenilla said the Board spends three hours for the stage 2 of the meeting proper to have an intense review of the Board\u2019s rate decision.<\/p>\n

\u201cDon’t forget it\u2019s (BSP\u2019s) considerable Supervisory powers over the banking and financial system to prevent imprudent and reckless behaviors in individual entities and sectors that lead to unsustainable risk build ups,\u201d he said.<\/p>\n

The central bank chief said these supervisory powers \u201cgrind on relentlessly.\u201d<\/p>\n

\u201cAs I say, it’s wrong to view the same way as 10 years ago how the financial system responds to risks\u00a0 and opportunities. It will be like looking at a child that never grows up or learns anything,\u201d he pointed out.<\/p>\n

Other measures involved \u201cstrategic long-term financial sector reforms\u201d that cover the domestic capital markets, foreign exchange markets, payment systems, financial inclusion and literacy.<\/p>\n

These measures, he said, are \u201call aimed at making our overall financial system function efficiently, resiliently, and responsibly.\u201d<\/p>\n

\u201cBSP is very focused and determined in pursuing these important reforms,\u201d he said.<\/p>\n

The central bank chief ended his message by making an analogy wherein he likened the domestic economy to a race car.<\/p>\n

He said monetary officials work hard \u201cto run our economy competitively so it finishes a winner.\u201d<\/p>\n

\u201cWe are talking careful preparation, regular tune-ups and upgrades, skillful driving, and constant monitoring. The engine is expected to get hot along the way. That’s what running engines do, he said.<\/p>\n

Espenilla, however, said that \u201cthere’s a huge difference between a hot engine and an overheated engine.<\/p>\n

\u201cIf we don’t like hot engines, we should keep our car parked,\u201d he added. (PNA)<\/p>\n","protected":false},"excerpt":{"rendered":"

MANILA – -The\u00a0 total picture of the economy , whether its overheating or not,\u00a0 cannot be discerned\u00a0 only through credit …<\/p>\n","protected":false},"author":33,"featured_media":127135,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[20472,20004],"class_list":["post-136968","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-bangko-sentral-ng-pilipinas-bsp","tag-governor-nestor-espenilla-jr","mauthors-joann-villanueva","mauthors-philippine-news-agency"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/136968","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=136968"}],"version-history":[{"count":0,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/136968\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/127135"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=136968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=136968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=136968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}