Diokno says Philippine economy ”robust enough to withstand the COVID-19 public health crisis”

March 14, 2020

The Bangko Sentral ng Pilipinas (BSP) said there is no reason to believe that the coronavirus disease 2019 (COVID-19) '' could severely cut the Philippine growth momentum.''

In a message by BSP Gov. Benjamin Diokno Friday night, the Philippines'' has both ample fiscal and monetary policy.''

''The truth is that the economic fundamentals are on our side. Even under the worst possible scenario, the Philippines can still grow this year and in the medium term by about 6 percent,'' said Diokno.

Diokno said the Monetary Board ''is ready to deploy any or all its policy tools, as appropriate, to address all challenges to our own financial markets and growth prospects. ''

Diokno said ''the irrational behaviour of consumers (hoarding of masks, panic buying), investors (sharp fall of stock markets all over the world), and some banks ( unusually heavy cash withdrawal from BSP) is based on fear not fact.''

The central bank governor outlined several trumps of the Philippine economy.

''It’s debt to GDP ratio is low and falling. Inflation rate is muted and within target range. The peso is steady, supported by a hefty GIR. It has a reliable and sustainable source of FX — OFW remittances, FDIs, and receipts from BPOs. The bank industry is sound and adequately capitalized,'' said Diokno. 

''The economy is robust enough to withstand the COVID-19 public health crisis,'' said Diokno.

''The coronavirus breakout is a public health crisis — not an economic crisis.  The focus should be on how to delay the spread of the covid-19 outbreak,'' he added. DMS