The use of the Gross International Reserves (GIR) and lowering the reserve requirement of banks to finance the Maharlika Investment Fund (MIF) may limit the tools at the disposal of the BSP during times when inflation is high.
THE use of the Gross International Reserves and lowering the reserve requirement of banks to finance the Maharlika Investment Fund may limit the tools at the disposal of the Bangko Sentral ng Pilipinas during times when inflation is high.
“If you believe there is high inflation and part of that is because of high liquidity, that’s [reserve requirement] one instrument [BSP can use to cool inflation]. I wouldn’t want the Bangko Sentral to lose these instruments,” Balisacan said. Balisacan also said the impact of drawing the financing for the MIF through the National Budget would largely depend on which part of the budget will be drawn from.
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