AMANDO M. TETANGCO JR.: Sound advice to government
The central bank has room to lower its policy rates should the global economic growth slow down further, but Malacañang must spend wisely to maximize a “limited policy space,” according to monetary officials.
Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. on Tuesday said that, along with an “appropriate” monetary stance, targeted government spending and the participation of the private sector would set “all engines of growth [to] fire up.”
In the Monetary Board’s meeting on policy rates last December, it was decided that the overnight borrowing rate and overnight lending rate be maintained at 4.5 percent and 6.5 percent, respectively.
The BSP said the decision was based on the assessment that the inflation outlook would continue to be manageable.
“The global growth picture has indeed turned more negative since mid-2011,” Tetangco said. “But if policymakers and the private sector are able to harness these buffers, our country will be able to meet the challenges of 2012 head-on.”
The government will have to ensure that its spending is targeted at sectors that will lead to greater job generation, apart from infrastructure projects that will solidify the base for sustained growth, the BSP chief said.
According to Budget Secretary Florencio B. Abad, the government has already started the ball rolling by allocating P438.8 billion, or about a quarter of this year’s national budget, to five priority areas for job generation and economic development.
This is “on top of the established drivers of growth like semi-conductor and electronics, business process outsourcing,” Abad said, adding that emphasis would be placed on tourism development, agriculture and fisheries development, and general infrastructure.
He said this year’s budget for the economic sector covers P182.2 billion for the government infrastructure program, and P22.1 billion for public-private partnership (PPP) infrastructure projects.
Also, there is a total of P10.9 billion for programs related to the production of rice, corn, high-value crops, livestock and fish.
Further, P24.5 billion has been earmarked for the construction, restoration and rehabilitation of irrigation systems.