MANILA -- (UPDATE) The Bangko Sentral ng Pilipinas cut the benchmark interest rate by 50 basis points on Thursday, seeking to defend the economy from the COVID-19 pandemic that plunged the stock market by record.

The overnight reverse repurchase rate, used by banks to price loans, will be set at 3.25 percent effective Friday, BSP Gov. Benjamin Diokno said in a text message to reporters.

The BSP also authorized "time-bound, temporary relaxation" of regulations on banks' compliance reporting, calculation of penalties on required reserves and single borrower limits, Diokno said.

The term spread on rediscounting loans relative to overnight lending rate was temporarily reduced to zero, Diokno said. Detailed guidelines will be released later Thursday, he said.

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Philippine stocks sank nearly 19 percent at the start of trading Thursday, following a 2-day break, triggering a trading halt. It closed 13.34 percent lower to 4,623.42.

The Bangko Sentral’s rate cut came after the Department of Finance announced a P27.1 billion spending plan to help fight the COVID-19 pandemic.

The entire Luzon island, home to half the population, is on lockdown until April 12 to stop the spread of the disease. People are advised to stay at home and travel is restricted to essential supplies and first responders.