Philippines’ Duterte signs law boosting central bank’s powers

MANILA (Reuters) – – Philippines President Rodrigo Duterte has signed a law that boosts the central bank’s ability to rein in inflation and increases its capital at a time of volatility in financial markets, the bank said.

The new law restores the central bank’s authority to issue debt paper as part of its regular operations, giving it greater flexibility in determining their timing and scale.

It also allows an increase in the central bank’s capitalization to 200 billion pesos ($3.82 billion) from 50 billion pesos.

“These reforms place the BSP (central bank) in a stronger position to pursue its price and financial stability mandate amidst a growing economy and the increasing sophistication of the financial system,” the bank said in a statement on Saturday.

The new law also widens the range of institutions under central bank supervision to include money service businesses, credit granting businesses and payment system operators.

Another law signed by Duterte late on Friday removes the cap on rice imports and replaces it with tariffs. This could further tame inflation that hit a near-decade high of 6.7 percent in September and October last year.

The central bank paused its monetary tightening cycle in December and February to allow its five straight previous rate hikes, totaling 175 basis points, to work their way into the economy.

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