FSCC to take ‘preemptive’ stance vs emerging systemic risks

THE Financial Stability Coordination Council (FSCC) said it will move to preempt the disruptive effects of emerging systemic risks, especially those caused by any negative developments on the global scene.

In a statement on Thursday, FSCC Chairman and Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said: “The Council will always choose to be preemptive against possible systemic risks.”

The statement was released after the FSCC’s recent meeting.

“The global outlook has changed significantly downwards over the last six months, and yet our Q1 growth was a strong 8.3% year on year. This reflects the resilience of the local economy,” Mr. Diokno, who was nominated as Secretary of Finance in the incoming government, said.

The Philippines’ growth momentum “is expected to be sustained despite fluidity of markets worldwide,” the FSCC said.

The council cited the International Monetary Fund’s World Economic Outlook report for April, which estimated Philippine growth at 6.5% this year, an upgrade from its previous view of 6.3% released in January.

The estimate is below the government’s own target of 7%-9% growth for the year.

“The rest of the world is already feeling the pressure from rising fuel costs and the recent policy actions of the US Federal Reserve,” the FSCC said.

The Fed is under pressure to decisively curb inflation. Fifty-basis-point hikes at each of the Fed’s next two meetings in June and July were all signaled, Reuters reported.

Also represented on the FSCC are the Department of Finance, Insurance Commission, Philippine Deposit Insurance Corp., and the Securities and Exchange Commission. — Keisha B. Ta-asan