Diokno Lists 3 Thrusts For Economic Recovery
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno outlined three thrusts of the government to nudge the economy back to health: liberalization in the economy, infra development, and financial inclusion.
Photo Insert: BSP Governor Benjamin E. Diokno
Diokno shared with foreign central bankers, other financial regulators, and institutional investors how the Philippines is striving to achieve a post-COVID economy that is stronger and more resilient, more technologically advanced, and more inclusive than ever before in a virtual event dubbed “Conversations with the Governor” organized by London-based think tank Official Monetary and Financial Institutions Forum (OMFIF).
OMFIF provides an international platform for central banking and public policy dialogues, such as through events whose audience includes financial sector regulators and financial industry players from the private sector.
During the event, Governor Diokno noted that the Philippines was already set to graduate from lower to upper-middle-income status right before the pandemic. He said the Philippines was keen to regain its pre-COVID momentum and become a much better economy in the post-COVID era.
“Looking ahead, we do not aim to simply regain the economic losses from the pandemic. We aspire for a ‘post-COVID-19 Philippine economy’ that is stronger and more resilient, more technologically advanced, and more inclusive than ever before,” Governor Diokno said in his speech.
The Governor shared that the Philippines is pursuing this goal in three ways and that the BSP is an active partner of the government toward this end.
First is by further liberalizing the economy and making it even more investor-friendly, such as through the country’s participation in the Regional Comprehensive Economic Partnership (RCEP) among select Asia-Pacific economies and legislative reforms like the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law. “On the part of the BSP, we support investment promotion through a regulatory environment that is welcoming to foreign investors and technological innovation,” Governor Diokno said.
Second is by infrastructure development. Citing the BSP’s contribution to the government’s infrastructure development drive, Governor Diokno said: “The BSP is contributing to infrastructure development through regulatory measures such as by increasing the single borrower’s limit (SBL) as well as deepening of the capital market that makes it easier for infrastructure companies to finance projects.”
The BSP last year implemented time-bound regulatory relief measures that included an increase in the SBL from 20 to 25 percent and exemption from the SBL of debt securities acquired by banks from market-making activities. These two measures were meant to support infrastructure development amid the pandemic.
Third is through the inclusion agenda. “[BSP] regulations and advocacy programs meant to ease access of micro-enterprises to credit and other financial services are in place and are constantly revisited for enhancement. The BSP likewise implements financial literacy programs that improve knowledge of Filipinos on savings and investments,” he said.
Governor Diokno also said the BSP is steadfast in its commitment to price stability and financial stability, which provide an enabling environment for consumption, investments, and overall economic growth.