{"id":180657,"date":"2018-09-09T04:50:28","date_gmt":"2018-09-09T08:50:28","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=180657"},"modified":"2018-09-09T04:50:28","modified_gmt":"2018-09-09T08:50:28","slug":"bsp-take-strong-immediate-action-vs-inflation","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2018\/09\/09\/bsp-take-strong-immediate-action-vs-inflation\/","title":{"rendered":"BSP to ‘take strong immediate action’ vs. inflation"},"content":{"rendered":"
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This was stressed by BSP Governor Nestor A. Espenilla Jr. on Friday, as markets continued to be affected by the surge in the rate of price increases to a multiyear high of 6.4 percent in August 2018. (Photo<\/a>: Bangko Sentral ng Pilipinas\/Facebook<\/a>)<\/figcaption><\/figure>\n

MANILA<\/strong>\u00a0— The Bangko Sentral ng Pilipinas (BSP) has affirmed its readiness to \u201ctake strong immediate action using the full range of instruments in its toolkit\u201d to address threats generated by higher-than-expected inflation, as demonstrated by its 100 basis points increase in key rates earlier this year.<\/p>\n

This was stressed by BSP Governor Nestor A. Espenilla Jr. on Friday, as markets continued to be affected by the surge in the rate of price increases to a multiyear high of 6.4 percent in August 2018.<\/p>\n

\u201cThe follow-through actions will also address other threats to higher inflation, such as excessive exchange rate volatility not consistent with underlying macroeconomic fundamentals in order to ensure that inflation returns to its 2 (percent) to 4 percent target over the policy horizon,\u201d he said in a message to reporters.<\/p>\n

He also said that the central bank will re-activate tolls like the Currency Risk Protection Program (CRPP), \u201cwhich will be made available to eligible corporates with foreign exchange obligations based on more liberalized rules.\u201d<\/p>\n

\u201cIn addition, the BSP will take all actions necessary to deal with speculative activity by market participants,\u201d he added.<\/p>\n

On Friday, the central bank, in a statement, said it will re-activate the CRPP, which was introduced in December 1997, to be made available to eligible corporations through commercial banks. It was explained that the facility is a \u201cnon-deliverable forward hedging facility, which is aimed at alleviating demand pressures in the foreign exchange spot market from borrowers seeking to hedge their future foreign exchange exposures.\u201d<\/p>\n

\u201cUnder the facility, parties agree that, on maturity of the forward contract, only the net difference between the contracted forward rate and the spot rate shall be settled in pesos,\u201d the central bank said.<\/p>\n

BSP Deputy Governor Diwa Guinigundo, in a briefing Friday, said the facility will address concerns of corporates with outstanding loans. He explained that businesses normally buy foreign exchange on spot for their future requirements.<\/p>\n

While this practice protects corporates if the Peso, for one, depreciates in the future, this increases volatility in the foreign exchange market, he said. \u201cBut if you have this CRPP, then your corporate players will have the assurance that they will be protected regardless of the fluctuations in the foreign exchange market,\u201d he said.<\/p>\n

Guinigundo stressed that the current volatility in the foreign exchange market is due to the impact of external developments, such as the trade tensions between the US and China and the currency crisis in Turkey and Argentina. \u201cSo I think by these measures of the BSP, the announced measures of the BSP, we should be able to address the concerns of the foreign exchange market,\u201d he said.<\/p>\n

\u201cThe BSP will make sure that we would also be able to deal with speculative activity in the market,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"

MANILA\u00a0— The Bangko Sentral ng Pilipinas (BSP) has affirmed its readiness to \u201ctake strong immediate action using the full range …<\/p>\n","protected":false},"author":44,"featured_media":135062,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-180657","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","mauthors-joann-villanueva","mauthors-philippine-news-agency"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/180657","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\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=180657"}],"version-history":[{"count":0,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/180657\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/135062"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=180657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=180657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=180657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}