EXPERTS: OTHER GOVT OFFICES MUST HELP BSP

OTHER branches of government should help monetary authorities in getting the economy out of slow growth, according to analysts.

- ANDREA E. SAN JUAN

A few days after the central bank decided to reduce the Target Reverse Repurchase (RRP) Rate by 25 basis points to 4.25 percent, experts shared their insights on what could really help address the slowdown in the economy, with most of them pointing out that growth could have been impeded by "structural" woes such as fiscal drag and issues on human capital.

"Monetary policy can't go it alone to extricate the economy from low growth," former Socioeconomic Planning Secretary Dante B. Canlas told the BusinessMirror in a Viber message on Wednesday.

"The BSP has been successful in disinflating the economy without causing a recession. It has cut interest rates in support of consumption & investment," Canlas pointed out.

As such, the former chief economist of the country said the central bank "needs the help of the fiscal authority (e.g., the Executive and Congress] to get the economy out of slow growth."

Fiscal authorities, Canlas added, should address the "growing" public debt with increasing debt service as this is "hindering" investments in what the former chief economist called "growth enhancers" like human capital (health and education) and modernizing infrastructure facilities such as roads, ports and airports.

Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri Jr. shared a similar sentiment as Canlas. He told this newspaper that since the BSP's mandate is "mainly" price stability, other agencies and branches of government would need to "move" to get the economy back on its feet.

"Since BSP's mandate is mainly price stability, then its other agencies and branches of government that need to move to improve the pace of recovery. Of course this requires the support and trust of the private sector," Neri told this newspaper.

Analysts were asked about their take on the situation after BSP Governor Eli M. Remolona Jr. recently signaled that monetary policy can only do so much.