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BSP Governor Calls For Broader Perspective in Dealing with Global Developments


BSP Governor Amando M. Tetangco, Jr spoke at the Joint Meeting of the ASEAN+3 and Eurosystem Central Bank Governors (The Joint Meeting) in Frankfurt, Germany on the experiences of the ASEAN on central banking and financial stability. The Joint Meeting brought together central bank governors of the 10 ASEAN economies, the central bank governors of Japan, China and Korea and the president of the European Central Bank (ECB) and governors of the ECB member central banks. It was a venue for exchanging views on how central banks in Asia and Europe may help promote regional and global financial stability as well as the respective roles and interactions of monetary, macroprudential and microprudential policies.

At the Joint Meeting, Governor Tetangco highlighted that while ASEAN economies were not as affected (as the EU was) by the Global Financial Crisis (GFC), ASEAN economies were affected by surges in capital flows in the aftermath of the GFC. These capital flows were very significant, particularly in relation to the size of the recipient economies. Governor Tetangco shared that most ASEAN central banks employed a menu of tools including macroprudential policies in addition to monetary policy and microprudential regulations to ensure that their domestic economies maintained both price and financial stability. He also reiterated that the calibration of tools continues to be a “learning process” for ASEAN. Nevertheless, ASEAN central banks actively pursue regional policy dialogue and utilize the regional surveillance provided by the ASEAN+3 Macroeconomic Regional Office (AMRO).

Governor Tetangco also shared his views at the ASEAN+3 Finance Ministers and Central Bank Governors Meeting (AFMCGM) on global growth prospects and their implications on the policy thrusts of emerging markets, including the Philippines. At the AFMCGM, multilateral agencies, i.e., the IMF, the AMRO and the ADB, were generally in accord in their assessment that the global recovery remains soft and uneven. In relation to this, Governor Tetangco shared that a majority of ASEAN+3 appear to have legroom to support economic activity as needed. He stressed, however, that for most jurisdictions in the ASEAN+3, monetary policy has carried more of the burden of adjustment. Governor Tetangco called for the fiscal authorities to ramp up spending to help prop up economic activity. He also added that there is a need to be watchful of corporate leverage in the region and to maximize the benefits of demographic changes in the ASEAN+3. Governor Tetangco concluded by saying that while each jurisdiction focuses on keeping “its own house in order”, it is equally important that each looks out for his neighbors, or to practice, what the Bank for International Settlements (BIS) calls, “enlightened self-interest”.

During both the Joint Meeting and the AFMCGM, Governor Tetangco underscored that in a highly integrated and fast-evolving environment, each jurisdiction has a stake in ensuring the strength and stability of the world economy.

The Joint Meeting and the AFMCGM were held at the sidelines of the ADB Annual Governors’ Meeting in Frankfurt during 2-5 May 2016, which Gov Tetangco also attended as Alternate Governor for the Philippines. 

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