MANILA — The Bangko Sentral ng Pilipinas (BSP) vows to continue implementing measures that would protect the Philippines against external shocks and to keep the attractiveness of the domestic economy.
This after the country continues to recover from the impact of capital flights that happened in the early part of 2014 due to anticipated normalization in US interest rates.
In the first quarter of 2014, the country posted a big deficit in its balance of payment (BOP) position because of the extreme volatility caused by the news that US monetary officials were considering the tapering of the Federal Reserve’s USD 86 billion monthly bond purchases.
This cut in the stimulus program also signaled the increase in US’ interest rates.
In 2014, the country registered a USD 2.8 billion deficit in its balance of payments position.
This was lower than the USD 3.4 billion revised deficit target for the year but was a reversal from the USD 5.1 billion surplus in 2013.
Last year, the Fed ended its bond purchases after noting the sustained improvement in the world’s largest economy.
Analysts forecast the Fed to start hiking interest rates as early as the middle of this year.
Central Bank governor Amando M. Tetangco, Jr. said the orderly tapering of the Fed’s stimulus program provided investors a good view of the situation ahead and enabled global funds to return to emerging market economies (EMEs) that have good fundamentals like the Philippines.
”Going forward, our policy remains to strengthen our buffers against external shocks so that good macrofundamentals would continue to be a pull factor for investments,” he said.
“It bears mentioning that throughout this period of market volatility our current account stood in surplus,” he said.