Metro Manila (CNN Philippines, August 4) — Banko Sentral ng Pilipinas (BSP) dividends to be contributed as sources of Maharlika Investment Corporation (MIC) will not impact the financial standing of the national bank, Governor Eli Remolona said.
The central bank chief said he has signed a memorandum sending the ₱31-billion worth of public funds to the national government.
He said the dividends have always been given to the government for national use.
\”We’re in very good shape,\” Remolona told CNN Philippines’ The Final Word. \”We don’t really need that money.\”
\”So we’re not worried at all,\” he said. \”We’re able to do what we’re supposed to do even when we’re paying the dividends.\”
The dividend’s inclusion as a source for the controversial investment fund previously sparked debates among the national bank’s former officials.
Former BSP Deputy Governor Diwa Guinigundo earlier said the bank will have a hard time performing its duties if its dividends are allocated to the fund, adding that the government will have to compensate for the public money that will be contributed which could be in the form of higher taxes.
Finance Secretary Benjamin Diokno countered this, insisting that the central bank’s contribution to the fund will not hurt its mandate to ensure price and financial stability.
Diokno also noted that during the peak of the COVID-19 pandemic, the BSP provided an interest-free loan amounting to ₱540 billion to the national government.
Remolona confirmed that BSP will be contributing two year’s worth of public funds to the government’s investment fund initiative.
‘No concerns’ on external shocks, global recession
BSP is likewise not worried about external shocks impacting the bank, with Remolona assuring that the country is ready for the looming global recession.
\”We know we have a huge amount of reserves,\” he said. \”So when it comes to external shocks, we’re ready. We’re not concerned at all.\”
The BSP kept its projections for the Philippines foreign exchange reserves or gross international reserves at $100 billion, enough to cover seven months of imports.
BSP also earlier decided to maintain interest rates in June, holding off hikes for the second time this year. The policy rate remained at 6.25%.
In June, interest rates on overnight deposit and lending facilities were also kept at 5.75% and 6.75%, respectively.
