The first ever joint general assembly for ACI Phils, IHAP, MART and TOAP  was held in Dusit Hotel Nikko with the night’s awaited speech “Sustaining Economic Gains through Monetary Stability” by BSP Gov. Amando M. Tetangco. His speech tackled issues raised by the public concerning the ongoing economic backdrop. Gov. Tetangco described the favorable economic backdrop with a fast 2nd quarter growth of 7.5 for GDP against a benign inflation atmosphere averaging 2.6% for the first 9 months. This lower inflation has paved way for interest rates to go down with 91 day T-bills lower by 2 percentage points compared to last year’s rate. The Governor also discussed the effects of increased global liquidity and the changing nature of financial risks,  2 of the numerous global forces that could alter the direction of the country’s leading economic variables. With an increase in global liquidity, he cited the BSP’s role to keep inflation in check. As a counter to this, a brief trace of the BSP’s monetary policy actions during the year were spell out. With regards to changing nature of financial risks, the country’s financial sector reforms undertaken by the BSP could well equip the banking system in mitigating these. In conclusion, to address the risks that may affect our economic gains, Tetangco enumerated the BSP’s policy driving forces:

1. To maintain a flexible economy anchored on proper macroeconomic fundamentals.

2. To mold a strong financial system that can withstand global competition and innovation.

With this, he ended his speech on a positive note with belief that the country can sustain its economic gains with sound macroeconomic fundamentals and increased sector reforms.

Directly following Tetangco’s speech was an open forum dis cussion composed of 4 representatives from the different organizations.  A number of important issues were raised:

1.  Money supply growth.

–         Gov. Tetangco discussed that a growth of 15% is a comfortable level with an allowance to move up until 20% provided that it won’t hit inflation.

  1. Fair value of the peso

–         Gov. Tetangco did not indicate a fair value of the peso but reiterated that they are focusing on a smooth movement of the peso.

  1. Time frame when fund managers will be  able to access offshore products

–         No specific time frame was given, however currently TOAP and other government agencies have been working with SEC and they still continue in their efforts to  promote their financial liberalization program

–         They plan to submit a time frame by the end of the year

4.   Possible rate cut

–         Tetangco did not reject the possibility of another rate cut, and cited that they are still considering developments in risk.