Philippines' Marcos signals continuity ahead with new economic team



* Monetary board member Medalla to head c.bank

* C.bank chief Diokno to lead finance ministry

* Marcos targets new jobs, lower fuel, rice prices

* New president tipped to expand Duterte's policy agenda

By Neil Jerome Morales and Enrico Dela Cruz

MANILA, May 26 (Reuters) - Philippines President-elect Ferdinand Marcos gave strong indications that he will maintain continuity in economic policy through his picks for central bank governor and finance minister on Thursday by adding familiar faces to his cabinet.

Marcos announced central bank chief Benjamin Diokno would become his finance minister when he takes office on June 30, making way for Felipe Medalla, a current monetary board member, to take over as Bangko Sentral ng Pilipinas governor. The two will be tasked with tackling inflation and joblessness.

Still, Marcos inherits a much stronger economy than that of the time of his late father, the dictator overthrown in the 1986 "people power" uprising, with debt stock at manageable levels, foreign reserves at record highs, and growth at healthy rates. "The first priority is always going to be the economy," Marcos, 64, said in an interview with his new press secretary streamed on his Facebook page.

"It's still down to jobs, to the increasing prices of commodities, some relief for the business community."

Marcos faces a delicate balancing act to ensure economic recovery is sustained and rising inflation, driven by politically sensitive increases in rice and fuel costs, is kept in check after he starts his six-year term.

He reiterated a campaign pledge to slash rice prices by more than half to 20 pesos ($0.38) per kg, but he said the Philippines, one of the world's biggest rice buyers, must continue importing to ensure stable domestic supply.

Gross domestic product grew by 8.3% in the first quarter from a year earlier, the fastest pace in three quarters, but a rise in interest rates could weigh on domestic consumption, which is major driver of growth.

The central bank kicked off its monetary tightening cycle, this month, much earlier than expected, to bring inflation back inside its comfort range. Diokno on Thursday said the central bank is looking at another 25 basis points rate hike in its June meeting.

Marcos won this month's election by a landslide, paving the way for a once unimaginable return to rule for the country's most notorious political dynasty. He is almost certain to command a supermajority in Congress, which could reduce obstacles to his economic agenda.

Economists broadly welcomed the appointments to Marcos's team, which also included Manuel Bonoan, tollway unit chief of conglomerate San Miguel Corp SMC.PS , as public works secretary, and Alfredo Pascual, former president of the University of the Philippines, as his trade minister.

Pascual will be required to balance economic relations with top trading partners China and the United States at a time of rising regional competition, with the Biden administration seeking to recoup strategic ground lost under predecessor Donald Trump via a new Indo-Pacific Economic Framework.

The appointments indicate further continuity from Marcos, who is expected to expand the economic policies of popular incumbent Rodrigo Duterte, including a largely delayed, multi-billion-dollar infrastructure overhaul.

($1 = 52.46 Philippine pesos)
Reporting by Neil Jerome Morales and Enrico dela Cruz; Writing by Karen Lema; Editing by Martin Petty and Christian Schmollinger

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.