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Next 6 years crucial to new BSP monetary framework |
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By LEE C. CHIPONGIAN
The Manila Bulletin 07/06/2005 Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said the next six years will see changes in the central bank organization but more importantly, improvements in monetary framework to "better anticipate possible shocks" in the system. ""We will intensify our capacity to anticipate possible shocks in the system (and we have to make sure) we have the right tools to deal with shocks," Tetangco said, addressing BSP officials and staff, during its 12th anniversary last July 4. The BSP’s main mandate is monetary policy geared towards price stability, such as inflation targeting, and banking supervision. A low and stable inflation preserves the consumers’ purchasing power, which means improved income or more food on the table and more services to buy. In his job of adhering to inflation targeting as a monetary framework, Tetangco said he will "not try to reinvent the wheel (instead) strive to continually improve it and keep it running more efficiently." Presently, the BSP is reviewing its monetary tools that include the reserve requirement, open market operations and credit policy. Tetangco said to better serve its purpose and ensure economic growth the BSP will "soup up" the inflation-targeting framework and reassess the components of the central bank forecasting tools and models. "The first is to make sure that we have the right tools to deal with shocks and the second will give us the comfort that we will be not ossified by surprises," he added. Tetangco also emphasized the importance of the BSP to be able to "row with the current and if necessary at some point, to row against it." "What is imperative is that the BSP is appropriately structured and equipped," he said. "While we deliver bold strokes to the market, we will not throw caution to the wind (and we will be) accountable to our efforts to keep prices stable and the banking system sound." Tetangco replaced Rafael B. Buenaventura, who retired last July 3. Malacanang said Tetangco, 52 and a central banker for 31 years now, is the perfect choice to ensure continuity and a smooth transition. Tetangco as deputy governor is in charge of banking services sector, economic research and treasury for the BSP. Buenaventura supports his appointment. As the deputy governor for banking services, Tetangco, who joined the central bank in 1974, is directly involved in the formulation and implementation of monetary and foreign exchange policy, including the conduct of open market operations and management of BSP’s international reserves, external obligations and foreign loans. Tetangco also looks after the central bank’s domestic credit operations such as rediscounting of financial institutions and the management and disposition of acquired assets as well as taking the charge over the BSP cash operations. The next BSP chief is a cum laude graduate of AB Economics at the Ateneo de Manila University with an MA for public policy and administration at the University of Wisconsin-Madison in the US. Before BSP, he worked for SGV & Co. for a year and in 19921994, he served as Alternate Executive Director of the International Monetary Fund. |
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