Why the Philippine economy is poised for a strong recovery
- Unlike many countries, the Philippines has ample monetary and fiscal space to draw on to fuel recovery, as well as a young, well-educated and mostly English-speaking population
Six months into the most consequential crisis in living memory, the world is coming to grips with what recovery may look like and the scale of effort needed to achieve it.
As governor of the Philippine central bank (Bangko Sentral ng Pilipinas, or BSP), I must consider every day the grave economic challenges facing my country, and craft monetary and financial sector policies to preserve stability and stimulate growth. This pandemic has reminded policymakers of our deepest responsibility – to safeguard lives and livelihoods.
Unlike many countries, the Philippines has ample monetary and fiscal space to draw on to fuel recovery. After over two decades of structural reforms and sound economic management, we have rising employment and incomes, 84 consecutive quarters of growth, improved debt ratios and increased foreign exchange reserves.
The central bank’s primary responsibilities are controlling inflation and maintaining financial stability. However, under my watch, it has played a more active role in poverty reduction and sharpened its focus on humanitarian outcomes.
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Coronavirus pandemic forcing jeepney drivers in the Philippines off the road to beg on the streets
For months, we prioritised necessities – enabling businesses to stay open, wages to be paid, and families to keep food on the table. To free up liquidity to keep economic activity churning, we cut interest rates by 175 basis points and slashed regulatory reserve requirements by 200 bps for big banks and 100 bps for small ones.
