The easing of measures targeted to address the impact of the coronavirus disease 2019 would be done in a “gradual, prudent, and informed manner”, Bangko Sentral Gov. Benjamin Diokno said.
In his speech during the webinar jointly hosted by the Financial Institute of the Philippines and Management Association of the Philippines, Diokno said a combination of monetary and fiscal measures were put in place to address the challenges posed by the epidemic.
He said the government implemented these measures because of strong macroeconomic policies after introducing structural reforms in recent years.
“The decision to unwind Covid-19 policy responses must be done in a gradual, prudent, and informed manner. Complete risk assessment based on all available data must support the decision and timing of unwinding. Likewise, appropriate communication must accompany the decision to unwind,” he said.
Among the measures that the BSP has put in place since last March include the total of 100 basis points reduction in the central bank’s key policy rates, the 200 basis points reduction in universal and commercial banks reserve requirement ratio, repurchase agreement with the national government for the purchase of P300 billion worth of government securities with a maximum repayment period of six months, and the consideration as part of banks’ RRR compliance the loans extended to micro, small and medium enterprises.
Meanwhile, the national government proposed a measure, which is now called To Heal as One Act (Republic Act 11469), that allows President Duterte to realign portions of this year’s national budget for Covid-19 response.
Under RA 11469, the government is mandated to extend financial aid amounting to P5,000 to P8,000 per household to about 18 million poor households nationwide to alleviate their plight during the implementation of the community quarantine since the second half of March.
Local governments around the country followed suit to help arrest the spread of Covid-19.
Quarantine levels have been eased around the country, with Metro Manila now under a modified enhanced community quarantine until May 31.
The BSP chief said the pandemic is adversely affecting the economy.
He, however, said the government is able to face the challenges head-on because of the policy reforms in the past.
Diokno said the current situation highlighted the need to strengthen digitalization as more people now utilize electronic payment transactions while the quarantine is in place.
“We should unceasingly work to improve the use of these innovative digital technologies to support economic activities,” he added.