BSP chief: Uncertainties to persist

The Bangko Sentral ng Pilipinas ( BSP) expects that “uncertainties” over Donald Trump may continue “for some time” even after new policies shall have been handed down by the new US president.

BSP Governor Amando Tetangco Jr. said there might be different interpretations of Trump’s policies and that these may cause some of the uncertainties to persist.

Trump has vowed to bring previously outsourced jobs back to the US in a more inward-looking policy that would negatively impact on the Philippines’ BPO industry.

“We should not expect that once Trump has laid out his policies there’s going to be stability. For some time, there will still be uncertainty,” Tetangco said over ANC.

Trump, a real estate mogul, took his oath of office yesterday as the 45th US president. He won the US elections on Nov. 8 in a shocking victory against Democrat rival Hillary Clinton.

In a separate briefing yesterday, BSP Deputy Governor Diwa Guinigundo said the uncertainties over Trump caused the peso to weaken on Thursday, hitting P50 to the dollar before closing at P49.76.

Tetangco said that the peso remains stable despite its recent weakness, although he noted that the BSP has already prepared for possible participation in the forex market to avoid sharp fluctuations, which can be destabilizing.

The BSP vows to closely monitor external developments.

“That’s the problem with uncertainty if you don’t know what’s going to happen, then you expect the worst and sometimes those expectations are self-fulfilling. So, the BSP will just have to explain to the public what is happening,” Guinigundo said.

He added that the Philippine economy has sufficient monetary policy and fiscal space.

“The economy continues to grow which means we have the sufficient buffers to ride out whatever challenges we may expect in 2017 and that should not be lost to the markets. The markets should always be mindful of these buffers instead of being driven by negative market sentiments proceeding from the climate of uncertainty and volatility,” Guinigundo also said.