T

HE Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, maintained on Thursday the benchmark interest rate at 6.25 percent, calling it a “prudent pause” that took into account the recent downward trajectory of inflation.

Inflation hit 8.7 percent in January before easing to 8.6 percent in February, 7.6 percent in March and 6.6 percent in April.

BSP Governor and MB chairman Felipe Medalla said in a briefing after the policy meeting that the interest rates on the overnight deposit and lending facilities were kept at 5.75 percent and 6.75 percent, respectively.

“Based on the sum of new information and its assessment of the impact of previous monetary policy actions, the Monetary Board decided that a pause in monetary policy tightening was appropriate. The BSP’s latest baseline projections continue to reflect a gradual return of inflation to the target band of 2 to 4 percent over the policy horizon,” Medalla said.

He said the average inflation for 2023 was projected to settle at 5.5 percent, lower than 6.0 percent previously, while the average inflation forecast for 2024 fell slightly to 2.8 percent. Meanwhile, inflation expectations for 2024 and 2025 are steady and within the target range.

“The Monetary Board also noted that while GDP growth has remained robust in the first quarter of 2023, demand indicators have also pointed to a potential moderation in the recent months, suggesting that previous policy rate increases by the BSP continue to work their way through the economy,” he said.

Medalla said the Monetary Board was encouraged by the recent mounting of whole-of-government actions to ease constraints on food supply.

He said even as headline inflation continued to decelerate with slower in- creases in the prices of food and energyrelated items, core inflation only eased marginally.

The balance of risks to the inflation outlook remains largely tilted towards the upside owing to persistent constraints in the supply of key food items, the potential impact of El Niño on food prices and utility rates and the effects of possible additional adjustments in transportation fares and wages.

Meanwhile, the impact of a weakerthan-expected global economic recovery continues to be the primary downside risk to the outlook.

“Given these considerations, the Monetary Board deems it prudent for the BSP to take a pause in monetary policy tightening while remaining ready to respond to emerging threats to inflation. The Monetary Board also deems it necessary to keep the policy interest rate at its current level over the near term, as ongoing price pressures continue to warrant close monitoring,” Medalla said.

“A prudent pause also allows monetary authorities to further assess how macroeconomic and financial conditions will evolve in view of tighter global financial conditions,” he said.

He said moving forward, the BSP would continue to monitor developments affecting the outlook for inflation and growth.

He said the BSP remained ready to resume monetary tightening as necessitated by emerging data, consistent with its primary mandate to promote price and financial stability.

When asked if there would be another rate hike this year, Medalla said it would depend on the trajectory of inflation.

MOA SIGNING. The Department of Science and Technology signs a memorandum of agreement for Community Empowerment through Science and Technology or CEST communities in Region 1. The signing was held at Don Mariano Marcos Memorial State University on May 16 in Sipalang, Bacnotan, La Union with the theme ‘CEST: Empowering Lives, Building Communities.’

DOE releases guidelines on offshore wind development

By Alena Mae S. Flores

THE Department of Energy on Thursday released the implementing guidelines on Executive Order No. 21 which establishes the policy and administrative framework for offshore wind development. Under the guidelines, permitting agencies are guided by the different stages of an OSW development project and the activities necessary for its successful and efficient implementation. The DOE said permitting agencies need to identify and submit the complete list of appropriate permits and clearances. These include all requirements, fees and procedures, including the detailed process flow diagram on or before June 18, 2023.

The DOE will then integrate into the Energy Virtual OneStop Shop system all the identified processes, which will be used by all permitting agencies, including the local government units, in processing the applications for permits from OSW developers.

These permitting agencies include the Department of Agrarian Reform, Department of Agriculture, Department of Environment and Natural Resources, Department of Justice , Department of Labor and Employment, Department of National Defense, Department of Public Works and Highways and Department of Trade and Industry.

Other agencies are Department of Transportation, Bureau of Customs, Bureau of Immigration, Bureau of Internal