Sy-Coson: Inflation "A Bit Tough To Bring Down

An influential corporate leader has expressed skepticism regarding the efficacy of conventional measures recommended by the International Monetary Fund (IMF) in addressing the steep rise in consumer prices in the Philippines.

Photo Insert: SM Investments' Tessie Sy-Coson pointed out that the soaring consumer prices in the country are primarily driven by global inflation, particularly in the United States.

During a recent panel discussion at the Post-SONA Economic Briefing, SM Investments Corp. vice-chair, Teresita Sy-Coson, exchanged views with IMF Representative to the Philippines Ragnar Gudmundsson, highlighting the challenges of managing inflation caused by external factors.

Sy-Coson pointed out that the soaring consumer prices in the country are primarily driven by global inflation, particularly in the United States.

Despite the efforts of the Department of Finance and the Bangko Sentral ng Pilipinas, Sy-Coson argued that the country is, in essence, bearing the brunt of "collateral damage" without the ability to effectively address the underlying causes, which lie beyond their control.

"I guess, as much as we want to lower our inflation rate, we are just one country in the whole world. So, I don't think we can do that much by ourselves. We can manage it, but I don't think we can do it according to the ideal way of managing inflation,” Sy-Coson said.

“It's a bit tough,” the SM group executive emphasized. Sy-Coson's comment was prompted by Gudmundsson's presentation on the IMF's suggested strategies for effective inflation management.

Gudmundsson put forward several key recommendations, one of which stressed the importance of maintaining the central bank's policy interest rates at their current higher level for an extended period.

The IMF representative further advised the central bank to carefully evaluate the potential upward risks to inflation, such as the impact of El Niño, potential wage pressures, and significant volatility in global commodity prices.

He also emphasized the importance of analyzing local factors, including domestic prices and inflationary expectations among market participants. Simultaneously, he acknowledged the challenge of monitoring external developments.

But Gudmundsson also credited the central bank's agility and ability to consider both domestic and external factors in its decision-making, highlighting its demonstrated ability to respond effectively to changing circumstances.

However, Sy-Coson appeared to have a lukewarm response to the IMF's suggested strategies for addressing domestic inflation, stating, “If we are left to ourselves, our [inflation] numbers are okay.”

She concluded: “We're affected by the geopolitical problems and the inflation. So I don't think, well, maybe we just have to try to manage it, but I don't think we can go into the idealistic level.”

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