LEADING VIEW: Amando M. Tetangco, Jr.

Anchoring the Philippine economy amid rough seas

  • By GlobalMarkets
  • 15 Jun 2017
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Copyright - Rob Murray

In light of increased global connectivity and in the after-math of the global financial crisis, the role of central banks in emerging economies has evolved and grown in impor-tance. Connectivity has height-ened the possibility of contagion to EMs from external headwinds— interest rate movements in advanced economies, geopolitical tensions, gyration in oil prices and slowdown of major trading partners, among others.


The Bangko Sentral ng Pilipinas (BSP) has been able to help keep the Philippine economy afloat amid these rough seas.
This is evidenced by the Philippines’ sustained and ro-bust economic growth, aver-aging 6.3% during 2010-2016, one of the fastest in the world, while keeping inflation low and stable. 

The guiding principle the BSP observes is sound and pre-emptive monetary policy and bank supervision. Sound, meaningful actions are based on data from the ground. Pre-emptive, because it is forward-look-ing, scoping the risks ahead and implementing appropriate measures.

In the case of monetary policy, being sound and pre-emptive includes assessing available tools (e.g., key interest rates, reserve requirements, term-deposit rates, etc.) and deciding which ones are apt for guarding against off-target inflation. 

In the case of bank supervision, it means implementing regulations (e.g., capitalisation requirements and risk management) that help supervised institutions, individually and indus-try-wide, stay robust even if identified or unex-pected risks materialise. 
Being sound and pre-emptive also means hav-ing a financial stability perspective to overlay monetary and banking supervision policies. As such, the BSP policy tool kit is now enhanced to include macroprudential measures, to control systemic risk. 
All these require balance, because while moving pre-emptively, the BSP also needs to ensure that its actions are carefully cali-brated to avoid costly unin-tended consequences.


In the area of monetary policy, we have enhanced our infla-tion-targeting framework. With sophisticated monitoring and forecasting tools, the BSP has better predicted price behav-iour, leading to low and stable inflation that has benefitted consumers and investors.  

In the area of bank supervision, a noteworthy achievement is industry growth on the back of prudent regulations. Calibrated implementation of Basel III principles and risk-based supervision has helped maintain stability of banks.

Now, the Philippine bank-ing system is one of the most resilient in the world. It has reliably funded investment requirements of the econ-omy, while keeping bad debts low and capitalisation levels sufficient. 

In the areas of payments and settlements, as well as financial inclusion, milestones respectively include regula-tions that encourage the use of e-money with proper safety nets, and those that promote financial serv-ices for micro clients. 


The milestones reflect a strong BSP institution. And so, when I step down in July, after serving two terms as BSP governor, I am confident the BSP will continue to pursue its mandate of price and financial stability conducive to sustainable economic growth, even in the face of external headwinds and other risks whose potential im-pact authorities have yet to fully grasp. It cannot go wrong if it adheres to the principles of sound and pre-emptive policymaking.

While challenges await the next captain of the ship, it is safe to say that BSP will remain a pillar of strength of the Philippine economy, which is widely anticipated to remain one of the fastest growing in the region and the world. 

  • By GlobalMarkets
  • 15 Jun 2017

All International Bonds

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3 Bank of America Merrill Lynch 52,401.35 173 6.31%
4 Barclays 50,153.02 148 6.04%
5 Deutsche Bank 44,937.03 167 5.41%

Bookrunners of All Syndicated Loans EMEA

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1 Deutsche Bank 9,857.42 14 13.05%
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5 BNP Paribas 4,132.76 19 5.47%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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3 Credit Suisse 1,727.84 7 7.61%
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5 Citi 1,285.41 7 5.66%