BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno on Thursday said the central bank will continue to help keep the economy on a robust growth trajectory.

“Moving forward, the BSP will continue to work with the national government to keep the economy on a robust growth trajectory and to address headwinds such as price pressures,” Diokno said in a statement following the release of the first-quarter gross domestic product (GDP) growth expansion.

Diokno said the 8.3-percent GDP expansion is a confirmation of the Philippine economy’s resilience.

The latest growth data was a reversal from 3.8-percent contraction in the first quarter of 2021. It was also higher than the 7.8-percent growth in the fourth quarter of last year.

“This was achieved by a whole-of-government approach, which required bold and decisive fiscal and monetary actions to remain in sync,” he said.

Diokno said that on the monetary side, the historic-low key policy rate supported credit activities, while time-bound regulatory and operational relief measures allowed banks to continue performing the important role of financial intermediation throughout the pandemic.

“The robust growth performance of the economy in the first quarter, which beat analysts’ expectations, along with other favorable macroeconomic indicators, helps fulfill the BSP’s

vision of a post-Covid Philippine economy that is stronger, more technologically advanced, more inclusive and more sustainable,” he said.

While the economy posted high growth in the first quarter, the rising inflation was cited as one of the major issues that the government needs to focus on.

In April, headline inflation soared to 4.9 percent, the highest recorded in more than three years driven by the increase in food and transport prices.

Diokno said the BSP supports the implementation of non-monetary measures by the government to address supply side pressures, such as boosting importation of specific food items experiencing price spikes and direct subsidies to vulnerable sectors.

President Rodrigo Duterte earlier issued Executive Orders (EO) 134 and 135 to expand the country’s pork and rice supply.

EO 134 aims to expand supply and further reduce prices of pork by extending the lower tariff of 15-percent in-quota and 25-percent out quota while EO 135 seeks to diversify rice sources by temporarily reducing MFN (most favored nation) tariff rates on imported rice to 35 percent from 40 to 50 percent.

Diokno said the government also continues to implement various targeted subsidy programs for the public transport and agriculture sectors to cushion the impact of rising oil prices.

As of April 30, 2022, around 180,000 public utility vehicle drivers and operators have received their P6,500 fuel subsidy.

“For our part, the BSP stands ready to adjust our monetary policy settings, should we see material risk of these supply side pressures spilling over to the demand side,” said Diokno.

During its last meeting, the Monetary Board of the BSP maintained overnight borrowing, lending and deposit rates at 2.00 percent, 1.50 percent and 2.50 percent, respectively.

The Monetary Board is scheduled to meet again on May 19.

In a report, Moody’s Analytics said the BSP will likely start adjusting policy rates as early as this month.

“The country faces one of the fastest inflation rates in the Asia-Pacific region. Higher prices for food and fuel are challenging the central bank’s accommodative monetary policy settings,” it said.

“A June rate hike is highly likely as broadbased growth is taking hold. However, with BSP under increasing pressure to arrest rising inflation pressures, we would not be surprised by a rate hike in May,” it added.