Jobs data key in Philippine central bank monetary response

09 Sep 2021

Governor of the Philippines central bank Benjamin Diokno has stated the country’s employment figures are still one of the key factors determining monetary policy response and timing, particularly during the pandemic.

 

Following the release of the Philippine July employment data this week, the central bank governor said the Labour Force Survey reveals the economic recovery is still uncertain, and short-term accommodative monetary policy is still required, reports Business Mirror.

 

“Results of the July 2021 Labour Force Survey indicate two things. First, as shown by the drop in the unemployment rate to its lowest level since the onset of the pandemic, the Philippine economy continues to progress in its economic recovery process,” Diokno said.

“Second, with the increase in the underemployment rate and drop in the labour force participation rate compared with the previous month’s figures, the recovery process comes with short-term challenges,” he went on to add.

Initial results of the survey published by the Philippine Statistics Authority (PSA) revealed there were 3.1 million people unemployed throughout the country, and 8.7 million underemployed Filipinos over the month.

The Bangko Sentral ng Pilipinas (BSP) governor said it is vital the country has a positive employment recovery before any consideration to taper the accommodative monetary policy can be made.

“The BSP has done a lot to support the economy amid the crisis.… The BSP will continue to support the economy for as long as necessary, until we see evidence of robust and sustained economic recovery, as reflected partly in the employment situation,” Diokno said.

During the pandemic, the BSP slashed its interest rates to an all-time low of 2%. Other measures generated more than P2.2 trillion of liquidity into the economy.

“We are committed to help the Philippines build on its nascent economic recovery, toward a better post-Covid-19 economy. This is consistent with the BSP’ primary objective of maintaining price stability conducive to a balanced and sustainable growth of the economy and employment,” Diokno added.