Steps taken this year by the Philippine central bank will be enough to dampen risk in the domestic property sector, the country's chief monetary official said, after land prices exceeded a 1997 high. Measures to tighten policy and cool the real estate sector have provided banks with "clear enough guidance to help them better appreciate the risks of their lending activities," said Central Bank of the Philippines governor Amando Tetangco. He cited a new credit-risk management framework, property stress tests for banks and an expanded definition of lenders' investments. Policymakers have already increased the Philippine benchmark interest rate twice this year, to 4 per cent from a record-low 3.5 per cent. Tetangco's comments come after land values in at least seven Philippine cities tracked by Colliers International UK climbed in the September quarter to levels above their peaks in 1997. Accelerating economic growth, rising remittances from more than 10 million Filipinos abroad and low borrowing costs are fuelling demand, the property broker said in a report this week. The authorities' steps are intended to ensure that banks have the capital to support lending activities and have assessed the creditworthiness of their clients, Tetangco said. The central bank will intervene in the foreign-exchange market if necessary to smooth out volatility as Bank of Japan and European Central Bank easing and good economic data from the United States point to a stronger dollar, Tetangco said. The country's economic fundamentals will also support the local currency, he said. The peso fell to 45.045 per US dollar last week in Manila, the weakest close since March 25, prices from Tullett Prebon show. "We continue to be on the lookout for excessive market reactions to news," Tetangco said.