The Bangko Sentral said the sooner the proposed stimulus measures are approved, the better to further cushion the economic impact of the global pandemic.
In an interview, BSP Gov. Benjamin Diokno said fiscal stimulus “works with a lag” just like monetary policy.
“So the sooner those measures are passed, the better. So BSP, on the record, is supporting the FIST (Financial Institutions Strategic Transfer) law, the PESA (Philippine Economic Stimulus Act of 2020), and other stimulus (package proposals),” Diokno said.
For one, the proposed FIST measure is similar to the Special Purpose Vehicle Act of 2002 that aims to help lessen the impact of the pandemic among financial institutions.
Under this proposal, asset management corporations may be created where banks can sell their non-performing assets and the new funds can, in turn, be extended by the banks to their clients as loans.
The BSP chief said the proposal to reduce corporate income tax rate from 30 percent to 25 percent is one of the things “that will strengthen our position”, adding that “right now, the Philippines is one of the countries that will emerge from this coronavirus crisis with a lot of strength”.
He added the government needs to build on this positive development to ensure the continued resiliency of the economy.
Diokno thus urged lawmakers to pass legislations, while sessions are being held until early June, that would further boost the country’s position as an attractive investment destination.