The Bangko Sentral ng Pilipinas has ignored proposals for it to print more money so that the peso will become weaker than it is now against the US dollar.Although the BSP admitted that it has been buying dollars from the market to help temper the appreciation of the local currency, it stressed that it would not increase its dollar-buying activities just so the peso would become artificially weak.According to BSP Governor Amando Tetangco Jr., the act of printing more money to significantly weaken the peso will have serious and adverse effects on the economy.“A few have encouraged the BSP to ‘print more money’ instead of sterilizing as a response to capital inflows. They would like the BSP to be more ‘resolute’ in influencing the exchange rate,” Tetangco said in a speech during an economic forum Friday.“My response to this is that doing so would be inflationary. [It] would lead to a tremendous expansion in domestic liquidity that would fan price pressures,” Tetangco explained.
Money Supply M3 in Philippines decreased to 4607662 PHP MIL in July of 2012 from 4738239 PHP MIL in June of 2012, according to a report released by the Bangko Sentral Ng Pilipinas. Historically, from 1980 until 2012, Philippines Money Supply M3 averaged 1276131.0 PHP MIL reaching an all time high of 4738239.0 PHP MIL in June of 2012 and a record low of 56544.0 PHP MIL in January of 1980.
The Money and quasi money growth (annual %) in Philippines was last reported at 5.31 in 2011, according to a World Bank report published in 2012. Average annual growth rate in money and quasi money. Money and quasi money comprise the sum of currency outside banks, demand deposits other than those of the central government, and the time, savings, and foreign currency deposits of resident sectors other than the central government. This definition is frequently called M2; it corresponds to lines 34 and 35 in the International Monetary Fund's (IMF) International Financial Statistics (IFS).
But I would certainly bet against such "heroic" iconoclastic idea, given that money printing has been the new dogma for central banking. If global central banking is a cartel, then Mr. Tetangco with his supposed "sound banking" approach will surely lose his job.