30 Mar 2020
The Philippines will “do everything” to avoid an economic recession as a result of the coronavirus pandemic, said central bank governor Benjamin Diokno on Sunday.
BSP Governor Benjamin Diokno said the Monetary Board has authorized a move to lower the reserve requirement ratio for banks by 500 basis points and has so far trimmed it by 200 basis points.
"We’ll do everything so we can avoid a recession in the Philippines. So, we’ll do both fiscal and monetary policy," he told ANC.
"We’ll try to avoid it as much as possible. You know, we have 84 quarters of continuous growth since the Asian financial crisis. I think the Philippines is resilient enough. I think, if we do the right thing, we can avoid a recession."
Socio-economic Planning Secretary Ernesto Pernia said early last week that gross domestic product could register negative growth of 0.6% to an expansion of 4.3%, based on how long the lockdown of Luzon will go on for.
Diokno stated that although GDP growth will likely remain on the positive side for the current quarter, it is expected to tumble into the negative during the second and third quarter, before ultimately recovering in the final quarter of the year.
Inflation is forecast at 2.4% in March, from 2.6% the previous month, Diokno noted.
"Food prices are fairly stable. Plus, with the price freeze, I think we’re very comfortable with the inflation at the moment," he said.
The governor also said he expects economic activity to resume during the April-June period.
"We’re okay. We still have long ways to go. I don’t expect this to last. This is temporary. Maybe things will be back to normal in a month or 2 months’ time," he said.
Diokno also said that for the time being, the country can depend on the assistance of $1.5 billion from the Asian Development Bank.
He positively reassured that the central bank has “a lot of money already printed.”
"The plant continues to operate as needed. We have one shift, we'll ramp it up next week moving forward," he said.
Banks across the Philippines have reassured the public that substantial cash would be made available during the lockdown – which is due to last a month and is currently in effect until April 12.
Diokno also took the opportunity to urge citizens and consumers to make use of e-payments and digital banking, in order to lower the chances of Covid-19 from spreading.
Previously, Congress also approved P275 billion for government to deal with the most basic needs of those vulnerable and affected by the pandemic.