Benjamin E Diokno: Fueling growth of FDIs in the Philippines - The BSP as an enabler Speech by Mr Benjamin E Diokno, Governor of Bangko Sentral ng Pilipinas (BSP, the central bank of the Philippines), at the 5th Joint Economic Briefing of the British Chamber of Commerce in the Philippines, Makati City, 19 June 2019.
They need to continue with the same monetary stance until the expected inflationary pressure threatens instability in the economic environment  What the Central Bank of Kenya has done during the crisis •  The Central Bank of Kenya – has pursued an accommodative monetary policy stance to help cushion the economy from the negative effects of the global financial crisis  •  Measures taken so far – Reduction of cash reserve ratio from 6% to 4.5% (100 basis points in December 2008 and 50 basis points in July 2009) – thus releasing an equivalent of Ksh.12.5 billion for lending to the economy – Consecutive reduction of the Central Bank Rate from 8.75% to 7.75% to signal to banks to lower lending rates – Allowing a reduction in foreign exchange reserves to less than 3 months to take pressure off the depreciation pressure of the Kenya shilling vis-à-vis the hard currencies (Had the CBK not allowed this, the inflationary effect of the shilling’s depreciation would have been worse – in terms of intermediate imports, oil prices etc)  4  BIS Review 159/2009  Kenya’s fiscal policy attempts to spur economic activity during economic downturn The 2009/10 Finance Bill took recovery head on – six solutions: •  Commitment from Treasury to maintain a stable macroeconomic environment  •  Creating fiscal space through expenditure rationalization from non-productive sectors/activities to productive sectors  •  Reducing the cost of doing business  •  Developing key infrastructure facilities and public works to stimulate growth, employment and poverty reduction  •  Fiscal stimulus through measures that expand economic opportunities in rural areas for employment creation  Global outlook •  The fear of the “Second Great Depression” has subsided – Impact of the crisis on output has been ameliorated by coordinated Government Policies  •  However, significant downside risks remain to the positive outlook – Global recovery could yet prove more anaemic than currently projected – Evidence still unclear as to whether the slowdown has hit bottom in SSA  Going forward •  Diversification of trade relations – China and India are gaining entry to African region – perhaps change trade & FDI flows – Regional integration to promote trade relations.