Exporters ask lawmaker to include provisions in amended BSP charter-A A +A
Tuesday, May 20, 2014
EXPORTERS are advocating that long-overdue amendments to the Bangko Sentral ng Pilipinas (BSP) charter include the twin objectives of supporting employment generation and boosting currency competitiveness to promote inclusive growth.
The Philippine Exporters Confederation, Inc. (Philexport) endorsed in particular, a provision in the bill filed by Sen.Ralph Recto to include full employment as a key policy guideline in the amended BSP Charter.
Recto has filed Senate Bill No. 618, or “An Act Providing for a Comprehensive Revision of the Charter of the Bangko Sentral ng Pilipinas by Amending Republic Act No. 7653,” also known as “The New Central Bank Act.”
In a signed letter to the lawmaker, Philexport president Sergio R. Ortiz-Luis Jr. said the bill echoed the association’s position that a monetary policy strengthening employment generation “will have significant and positive effects on the country’s economic and financial development.”
Ortiz-Luis added, “The BSP has indicated in a letter that it is not inclined to adopt employment generation as a mandate because of mistakes in the past,” alluding to the BSP apparently having been pressured by politicians to fund certain sectors of the economy and government social programs.
Ortiz-Luis called for the appointment of more economists and academicians to the BSP board and for measures that increase transparency and accountability.
At the same time, Philexport strongly recommended a second major charter monetary policy-promoting a competitive exchange rate as an inclusive growth strategy.
“We appreciate recent BSP efforts to help temper strong fluctuations and market volatility by institutionalizing certain policy measures that somehow made the peso more competitive. However, we believe that the BSP can do much more than pursue its inflation targeting mandate by appropriate policies that promote an economy that is more sustainable, investment-led, inclusive and pro-poor,” the letter said.
Ortiz-Luis pointed out that other Asian countries, such as China and Japan, have already adopted monetary policies aimed at improving their economies by maintaining competitive exchange rates.
“In the process, their manufacturing industries became competitive and robust as we know them to be today, generating more employment for its people. This is partly because products from local agriculture and manufacturers will be patronized by upstream manufacturers and exporters, since local raw materials will relatively be cheaper than imported ones,” he continued.
But the business community expressed alarm over proposed bills mandating a P150-billion increase in the BSP’s budget.
“This will mean P150 billion deduction from the country’s budget which could be more significantly used for disaster reconstruction, education and health projects,” Philexport said.
The exporters’ umbrella organization also batted for provisions that can ease access of MSMEs to financing. “Empowering MSMEs in this manner can create positive ripple effects in terms of livelihood and employment particularly in the countryside,” said Ortiz-Luis.
He, however, objected to proposals to provide immunity to the BSP from lawsuits, noting that “this is not consistent with the principle of good governance.”
The current BSP Charter, Republic Act 7653, or the BSP Act of 1993, is 21 years old and needs updating to respond to the requirements of present times. Philexport News and Features
Published in the Sun.Star Cebu newspaper on May 21, 2014.