Connect with us

Hi, what are you looking for?

Top Stories

Editor's Pick

Election spending not a concern for prices — BSP


By Luz Wendy T. Noble, Reporter

PHILIPPINE ELECTIONS next year are unlikely to cause consumer prices to spiral out of control because the economy remains below its full capacity, according to the central bank.

“It will not be significant enough to affect the path of inflation, which we see going back to within the target range in 2022,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila, Jr. told a news briefing on Boracay Island in central Philippines on Thursday.

“Demand conditions continue to be muted so any additional spending will come at a time when we are still operating below full capacity,” he added.

The Monetary Board on Thursday cut its inflation forecast for this year to 4.3% from 4.4%, though this is still above the BSP’s 2-4% target. Estimates for 2022 and 2023 were kept at 3.3% and 3.2%.

At the same meeting, the Monetary Board kept the key policy rates untouched at their record lows. Central bank Governor Benjamin E. Diokno said they need to keep supporting an economic recovery that has gained traction.

Election spending helps boost growth because it fuels consumption, but could cause faster inflation, Asian Institute of Management economist John Paulo R. Rivera said.

“While election spending accelerates the multiplier effects of consumption on economic growth, it also reinforces the pressure on inflation given the combined effects of holiday spending and premature campaigning,” he said in a Viber message.

Election-related spending contributed about 1% to economic output in past presidential elections, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

But the 2022 elections might be different amid restrictions related to a global coronavirus pandemic, he said in a Viber message.

“Election-related spending for 2022 could be reduced compared to previous elections amid greater focus on social media and some restrictions on person-to-person campaigning,” he said. “Campaign contributions from donors could also be reduced amid cost-cutting during the pandemic.”

Mr. Dakila said political developments are not a “significant consideration” in formulating monetary policy. “We have always been emphasizing that the decision of the board is guided by the inflation outlook.”

Inflation continued to exceed the target at 4.6% in October, though slower than 4.9% in September mainly due to a slower increase in food prices. Inflation averaged 4.5% for the 10 to October.

Mr. Dakila had said inflation might return to levels within the BSP target as early as this month. The central bank is set to review policy rates on Dec. 16.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Editor's Pick

The Board of Investments (BoI) has cleared Sinoma Energy Conservation (Cebu) Waste Heat Recovery Co. Inc. to serve as the operator of a 4.5-megawatt...


In the wake of Covid-19, people are working harder than ever. While many of us thought productivity may dip when we started working from...


Few individuals can resist the temptation to try before they buy; therefore, it was only a matter of time until online casinos realized this...

Editor's Pick

REUTERS WASHINGTON – The chair of the U.S. Senate Commerce Committee on Wednesday asked a regulator to investigate whether Meta Platforms’ Facebook misled its...

Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Secrets Of Richdads. All Rights Reserved.