Philippine central bank says to keep financial volatility in check

[MANILA] The Philippine central bank will keep financial volatility in check and sees no reason to change its monetary policy stance at the moment, its governor said on Friday.

"For the moment, BSP (Bangko Sentral ng Pilipinas) is geared to keep the interim financial volatility in check," Governor Amando Tetangco told reporters in a text message. "We don't yet see a strong impetus to change the stance of monetary policy."

Separately, BSP Deputy Governor Diwa Guinigundo said the central bank would continue closely watching the "balance of risks on inflation outlook." "We stand ready to use all available tools to safeguard financial and price stability," Guinigundo told reporters.

The BSP officials' remarks came after the European Central Bank launched a government bond-buying programme which will pump hundreds of billions in new money into a sagging euro zone economy.

While Tetangco expects the ECB action to further ease monetary conditions in the European Union to boost market confidence in the near term, he underscored the need for economic reforms in that region. "In the medium term, (the ECB move) needs to be followed through by structural reforms in the national economies and adjustments in EU labour market conditions, among others," he said.

The BSP kept its key policy rate on hold at 4.0 percent for a second meeting last month, amid some softness in economic growth in the third quarter, and after five consecutive tightening moves to keep prices in check.

The central bank next meets on Feb. 12 to review policy.

REUTERS