BSP: US Fed's low interest stance good for PHL

Governor Amando Tetangco Jr. of the Bangko Sentral ng Pilipinas (BSP) said the decision of the United States’ Federal Reserve Board to maintain its short-term interest at near-zero levels bodes well for the Philippine economy. US Fed Chairman Ben Bernanke said their interest rates will stay at close to zero until late in 2014.

 

"The Fed move affirms some policy certainty from that part of the world, which is important for anchoring global investor action and which could translate to providing emerging market economies (EMEs), including the Philippines, some policy breather to concentrate on improving domestic demand," Tetangco said.

 

Last Jan. 19, the BSP’s policy-setting Monetary Board reduced by 0.25 percent its overnight borrowing or reverse repurchase (RRP) facility and 6.25 percent for the overnight lending or repurchase (RP) facility “to help boost economic activity and support market confidence.”

 

The MB will meet again on its policy rates on March 1.

 

Tetangco also opined that “the US Fed action sustains the positive growth outlook in the US, this should also be positive for our own trade prospects."

 

The BSP chief had earlier noted how 15 percent of the Philippines’ total world trade is with the United States.

 

He also said 42 percent of overseas Filipino remittances and 73 percent of earnings of business process outsourcing (BPO) firms come from the US. Foreign direct investments from American investors make up 23 percent of total FDI. — ELR, GMA News