BSP vows to keep easy money policy

Photo by Michael Varcas, The Philippine Star

Diokno says ‘not so concerned’ about Omicron

By Luz Wendy T. Noble, Reporter

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno on Thursday vowed to continue keeping an accommodative monetary policy, as he downplayed the possible impact of the Omicron variant of the coronavirus disease 2019 (COVID-19) on the economy.

“We will continue our accommodative monetary policy until needed by the National Government. We’re not so concerned with the new variant [Omicron]. I think there’s too much exaggeration on the impact of that,” Mr. Diokno said at an online briefing on Thursday.

The Monetary Board has maintained policy rates at record lows to support the economy’s nascent recovery. Its last policy review for the year is scheduled on Dec. 16.

The World Health Organization (WHO) last week called Omicron “a variant of concern,” its highest rating. According to Reuters, WHO epidemiologist Maria van Kerkhove said that data should be available on Omicron’s conta-giousness in the next few days.

So far, the variant has not yet been detected in the Philippines, but the government has already closed its borders to South African countries and other countries in Asia and Europe where Omicron infections have been recorded.

The Philippines has also suspended the two-week trial reopening to foreign tourists from Dec. 1 as officials considered the risk from the variant.

Mr. Diokno on Wednesday said that while economic activity is improving, emerging variants may pose risk when a big part of the population remains unvaccinated.

Data from the Department of Health (DoH) showed 36.869 million Filipinos are fully vaccinated as of Dec. 1. The government hopes to fully vaccinate 54 million Filipinos by the end of the year.

The economy expanded by 7.1% year on year in the third quarter. This brought year-to-date gross domestic product growth to 4.9%, near the upper end of the government’s 4-5% target for 2021.

“I think the best thing really to do for the Philippines is vaccinate, vaccinate. And we have sufficient vaccines available,” Mr. Diokno said.

Security Bank Corp. Chief Economist Robert Dan J. Roces said the National Government support will be more crucial in mitigating the possible impact of the Omicron variant.

“Non-monetary policies should be sufficient to mitigate any impact [of Omicron], if at all, as monetary policies may only do so much,” he said in a Viber message.

“In the case of virus containment, it seems a one-size-fits-all approach is detrimental to recovery, so a targeted containment even down to the barangay level may be better,” he added.

Amid concerns over the variant’s transmissibility, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said it is important to apply the best practices from the pandemic response.

“If it [Omicron] will bring a resurgence, then we have to apply the learnings and adopt best practices. If needed, there should be tighter border controls, better tracing and treatment as were done by countries that became suc-cessful in dealing with community spread,” Mr. Asuncion said in a Viber message.

Mr. Asuncion said policy makers should consider “disincentivizing” unvaccinated people, like requiring COVID-19 testing prior to joining public activities or eating out in restaurants.