By Melo M. Acuña
Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno said a “U-shaped” recovery was still expected for the Philippine economy once the fiscal and monetary stimulus measures gain traction.
Speaking before the Wednesday Roundtable @ Lido virtual forum, Diokno said the BSP had instituted a package of “extraordinary measures” to ensure sufficient liquidity and provide regulatory relief to financial institutions.
These measures include:
- reduction in the monetary policy rate by 125 basis points since January 2020;
- reduction in the reserve requirement ratio by 200 basis points;
- purchases of government securities in the secondary market;
- reduction in the overnight reserve repurchase volume offering;
- engaging in repurchase agreements with the national government amounting to P300 billion; and
- approval of a package of measures to further reduce the financial burden on loans to micro, small and medium enterprises (MSME).
Assistance for MSMEs would allow support to displaced overseas workers who plan to shift or engage in business operations, Diokno said.
Diokno said the BSP also remitted P20 billion in advanced dividends to the national government even if it was no longer required to remit at least 50 percent of its net income under an amended charter.
The policy-making Monetary Board approved the extension of temporary regulatory and rediscounting relief measures to BSP-supervised financial institutions, which include the relaxation of regulations such as the single borrower’s limit from 25 percent to 30 percent to allow banks to lend more.
The BSP also relaxed the penalty for reserve deficiencies and the compliance period for supervisory and reportorial requirements. This will allow banks to focus on the delivery of financial services and “know your customer” requirements to facilitate access by the public to financial services, the central bank chief said.
“Even as we enable the economy to gradually regain its footing, we should continue with our efforts to make the economy nimbler to adapt to the new economy,” Diokno said.
“Once the economy opens up, construction workers may be absorbed by the government’s ‘Build, Build, Build’ while the government needs about 100,000 to do contact-tracing,” he added.
The Covid-19 pandemic will require the Philippines to train more nurses, doctors and other medical professionals. The country also needs to train the youth to be computer and data analysts, he said.
“We have they demographic advantage as our median age is 25 and they can find overseas employment after this pandemic,” Diokno said.