Going the distance with structural reforms  In this challenging period of very strong capital flows and expectations of continuing strong capital flows, or as one economist has called it the whipsaw of huge capital movements, the question is – do monetary authorities still have the firepower and yet be market-friendly in their policy responses? To this, my response is yes.
The BSP has recognized long ago the need to deploy a deep toolkit in addressing the contemporary challenges confronting emerging market central banks that are at the receiving end of strong capital flows. It has used a variety of instruments to achieve low and stable inflation, prevent excessive volatility in the exchange rate and maintain broad financial stability.