Fri, 07 Aug 2020

Philippine central bank chief optimistic of post-Covid recovery

Philippine Information Agency
09 Jul 2020, 18:30 GMT+10

QUEZON CITY, Philippines (PIA) -- Despite the global economic recession brought about by the COVID-19 pandemic, the Philippine economy remains stable Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in Tuesday's pre-State of the Nation Address (SONA).

Dubbed the "Tatak ng Pagbabago 2020: The Pre-SONA Forum," this year's three-part forum series is a platform for Cabinet officials to discuss key policies and detailed programs in preparation for President Rodrigo Roa Duterte's SONA.

In a kick-off session, the Central Bank chief delivered the report of the Economic Cluster via live streaming on the official Facebook pages of PCOO, Radio Television Malacanang (RTVM), and various government agencies.

He reported that the Philippines entered into the pandemic with strong macroeconomic fundamentals compared to its regional peers.

In fact, he said, the Philippines was dubbed the 6th best among 66 emerging economies, and number one among its Southeast Asian peers by The Economist, an international publication.

This is based on the Philippines' relatively strong financial strength on four metrics, namely public debt, foreign debt, cost of borrowing, and reserve cover.

He believed this is an assurance that the country could easily recover in the coming years.

"The robust growth, good fiscal performance, and strong external and financial sector positions provided the country with relative stability amid the COVID-19 pandemic," he explained.

The country's inflation rate remains manageable with an average of 2.5 percent, which is within the National Government's target of 2.0 - 4.0 percent for this year, considering the impact of the COVID-19 pandemic on the domestic and global economic conditions, he said.

He attributed the economic stability to strong banking systems, robust external payments position, high gross international reserves (GIR), among other factors.

Diokno also boasts of the country's low external debt-to-GDP ratio with 21.4 percent as of end-March 2020.

"Our debt-to-GDP ratio remains as one of the lowest among ASEAN member countries," he said.

Meanwhile, the imposition of the nationwide lockdown has heightened the importance of digital banking transactions.

BSP observed increased volume and value of the combined transactions of PESONet and InstaPay during the ECQ period, while the volume and value of check payments and ATM withdrawals declined.

"The volume of InstaPay transactions from April to May grew 57% while the volume of PesoNet surged significantly by 325%," he said.

He also encouraged the public to use national QR code standard as well as the use of online payment facilities for government transactions.

"The use of QR codes for payments has also been gaining traction as an alternative to the traditional debit and credit card payments. It is a quicker, easier and safer means of payment through code scan using a smartphone rather than having to bring a credit card," Diokno explained.

The BSP maintain its commitment to implement policy measures that would "reassure markets, restore business confidence and ensure quick recovery once the lockdowns are lifted," he said.

"The decision to unwind COVID-19 policy responses must be done in a gradual, prudent, and informed manner," Diokno concluded. (MTQ/PIA-IDPD)

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