Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said on Thursday that any move to end measures to address the coronavirus disease 2019 (Covid-19) pandemic’s economic impact will be made cautiously and will be data-driven.
In his speech during the 27th membership meeting of the Rotary Club of Manila, he said recovery from the Covid-19-induced global health problem, which led to economic contractions around the world, is tough.
“But this pandemic, as with other challenging periods in our history, has once again revealed our resilience and fortitude as a nation. We will use this resilience to continue working hard in ensuring that our country will sustain a stable recovery from the pandemic,” he said.
Among the measures that BSP implemented to help cushion the pandemic’s impact are the 200 basis points reduction in the BSP’s key policy rates, which to date is at record-low of 2 percent; the up to 200 basis points cut in banks’ reserve requirement ratio (RRR); and the authorization for banks’ micro, small and medium (MSME) lending as reserve requirement compliance for a limited time.
Amid the 10-percent economic contraction in the first three quarters of 2020, signs of recovery are slowly showing up, Diokno said, tracing this partly to the continued improvement of domestic fundamentals before the pandemic hit.
He said domestic growth, as measured by gross domestic product (GDP), averaged at 6.4 percent from 2010 to 2019.
“The robust growth of the domestic economy in recent years was achieved in an environment of generally stable inflation and was anchored on purposeful structural reforms,” he said.
Improvement on the country’s external payments position, record-high international reserves, improved external debt metrics, and healthy public finances were attributed to prudent policymaking.
The domestic banking system remains stable and sound and is “well-functioning based on all metrics, he said.
“These robust fundamentals gave us the monetary and fiscal space to navigate the first few months of this crisis,” he added. CURRENTPH