Philippines to pursue stronger, more resilient post-COVID-19 economy

MANILA, Philippines — The Philippines is pursuing a stronger and more resilient post-COVID economy and not just to simply regain the losses caused by the pandemic, according to the Bangko Sentral ng Pilipinas (BSP).

In a virtual event organized by London-based think tank Official Monetary and Financial Institutions Forum, BSP Governor Benjamin Diokno said 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.

“Looking ahead, we do not aim to simply regain the economic losses from the pandemic. We aspire for a ‘post-COVID Philippine economy’ that is stronger and more resilient, more technologically advanced, and more inclusive than ever before,” Diokno said.

The Philippines slipped into recession as the economy shrank by a record 9.6 percent last year, ending 21 years of positive growth.

Due to intermittent lockdowns, economic managers, through the Development Budget Coordination Committee (DBCC), further slashed this year’s gross domestic product growth target to a range of four to five percent from the original six to seven percent.

The DBCC expects the economy to grow between seven and nine percent in 2022 before normalizing at a range of six to seven percent in 2023 and 2024.

Diokno told foreign central bankers, other financial regulators and institutional investors that the Philippines was already set to graduate from lower to upper middle-income status just before the pandemic.

To help the Philippines regain its pre-COVID momentum and become a much better economy in the post-COVID era, the BSP chief said the government is further opening up the economy, pursuing massive infrastructure buildup and pushing financial inclusion.

Diokno said the government is further liberalizing the economy and making it even more investor-friendly though its participation in the Regional Comprehensive Economic Partnership (RCEP) among select Asia-Pacific economies.

He said the government is also pursuing legislative reforms like Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises or 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,” Diokno said.

Furthermore, he said the BSP is helping the government in its infrastructure development drive through the Build Build Build by increasing the single borrower’s limit (SBL) to 25 from 20 percent.

“The BSP is contributing to infrastructure development through regulatory measures, such as by increasing the SBL, as well as deepening of the capital market that makes it easier for infrastructure companies to finance projects,” Diokno said.

The BSP chief also said it is pushing regulations and advocacy programs meant to ease access of micro enterprises to credit and other financial services.

“The BSP likewise implements financial literacy programs that improve the knowledge of Filipinos on savings and investments,” he said.