The Bangko Sentral ng Pilipinas has expressed alarm on the impact of the unfolding Ukraine-Russia conflict on the Philippine economy, urging the national government to initiate “social protection” measures to cushion its impact on various sectors.

“We expect the ongoing conflict to continue to exert upward pressures on key international commodity prices, particularly oil and wheat. Meanwhile, the ongoing conflict could also cloud prospects for global trade and investment, as uncertainty spills over into financial markets through higher volatility and weaker market confidence,” the BSP said in an official statement released March 10.

“In this regard, the BSP supports the National Government’s initiatives to implement appropriate fiscal interventions to cushion the economy from increased upside risks to inflation and to safeguard the momentum of economic recovery,” it said.

The BSP said “timely social protection measures” could help alleviate the impact of rising crude oil prices on the transportation and agriculture sectors, while sustained efforts to ensure adequate domestic food supply could mitigate further supply-side pressures on inflation.

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“Efforts to facilitate further relaxation of restrictions in a safe and deliberate manner could also help in improving confidence and the reinvigoration of economic activities,” it said.

“The BSP remains focused on preserving monetary policy support as sustaining the economic recovery remains a priority. At the same time, the BSP stands ready to respond to potential second-round effects arising from elevated inflation pressures that can disanchor inflation expectations, in keeping with our price and financial stability mandates.”

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