MANILA, Oct 4 (Reuters) - The Philippines’ plan to overhaul its taxation system will only have a modest impact on inflation and will not require any changes in the central bank’s monetary policy, its governor said on Wednesday.
“Any moderate, short-lived inflationary impact of (the tax reform) need not be responded to by monetary policy,” Nestor Espenilla told Reuters in an interview for the Global Markets Forum.
Espenilla also said a potential cut in the banks’ reserve requirement will be “measured” and “calculated” and that authorities are looking at developing the debt market by creating “longer-dated instruments to support infrastructure programs.”
“It can also absorb liquidity that will be released with the lowering of the reserve requirement,” he said.
For more information on the Reuters Global Markets Forum or to join the conversation, follow this link: here Reporting by Karen Lema, Martin Petty and Neil Jerome Morales; Writing by Manolo Serapio Jr.; Editing by Sam Holmes