Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. emphasized the persistent and complex challenges posed by trade shocks to emerging market economies during a high-level panel at the International Monetary Fund (IMF) flagship seminar, “The Evolving Art of Monetary Policy in Emerging Markets,” held on 25 April 2025 in Washington D.C.
Speaking on the sidelines of the IMF–World Bank Group (WBG) Spring Meetings, Governor Remolona underscored that trade shocks, unlike typical supply shocks, tend to have more lasting economic consequences. “Supply shocks come and go, but this kind of shock that we are seeing now tends to stick around,” he remarked.
The BSP Governor explained that trade shocks can adversely affect long-term investment, particularly in emerging markets, as capital goods are heavily reliant on imports. “Trade shocks tend to affect investment in the longer term, partly because investment goods tend to be highly dependent on imports,” he added. This, he warned, could lead to a shrinking capital stock and a potentially lower growth trajectory for developing economies.
While acknowledging that monetary policy has limited tools to directly counteract trade shocks, Governor Remolona noted that easing inflation is providing the BSP greater flexibility. “Slowing inflation gives us more degrees of freedom to reduce policy rates,” he said. The BSP recently lowered its key policy rate to 5.5 percent on 10 April 2025 and signaled continued room for further easing, depending on evolving economic conditions.
Governor Remolona led the Philippine delegation to the Spring Meetings, accompanied by Monetary Board Member Rosalia V. De Leon, Assistant Governors Zeno Ronald R. Abenoja and Veronica B. Bayangos, as well as key officials, including Treasurer of the Philippines Sharon Almanza and senior representatives from the Department of Finance and Department of Budget and Management.
The BSP delegation engaged in a series of strategic discussions, including meetings with IMF Managing Director Kristalina Georgieva, ASEAN Finance Ministers and Central Bank Governors, credit rating agencies, and major global financial institutions such as Citi, JPMorgan, and Bank of America. The delegation also held a bilateral meeting with Her Majesty Queen Máxima of the Netherlands, the UN Secretary-General’s Special Advocate for Financial Health and Inclusion.
The 2025 IMF-WBG Spring Meetings took place from 21 to 26 April under the theme “Anchoring Stability and Promoting Balanced Growth.”
