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THE
Bangko Sentral ng Pilipinas said on Monday asset prices
such as equities and real estate, while rising, remain
manageable and rejected notions it was time to make
adjustments in monetary policy.
At the
conclusion of its financial literacy campaign in Cebu
City, which also coincided with the launching of its
e-Rediscounting program in the Visayas, central bank
director Francisco Dakila said asset prices may have
inflated in recent months but the extent of its
expansion “does not yet pose a threat. . .It’s a weak
link.”
The last
time the Monetary Board made an adjustment was in
October 2005 with a 25-basis point hike to stabilize
prices.
The
general fear is that asset prices, driven by sustained
flows from overseas Filipino workers, may have already
started to bulge to such an extent that it should worry
the BSP. Not so, reiterated Dakila, one of the BSP’s
most senior economists.
He said
the interrelationship between money made available to
ordinary Filipinos, its impact on consumption, and its
consequent effect on demand that in turn pushes
inflation upward, plus other variables the Monetary
Board scrutinizes every six weeks, help determine
whether the overnight rates of the BSP get another
boost, are kept frozen or cut.
BSP
Governor Amando Tetangco Jr. said discussions on the
subject are premature. He said there are regulatory
safeguards in place, such as the cap on bank lending to
the real-estate sector. “We have lowered [real-estate
loans] to 20 percent of loan portfolio from 30 percent.
At the outset of the 1997 regionwide financial crisis,
we brought this down to just 12 percent.”
He added
some have argued the continued flow of OFW money has put
more disposable income in the hands of more Filipinos
that could lead some to buy real estate for speculative
purposes, but that data gathered by the economic
research unit of the BSP do not support this. |
