Bangko Sentral readies full arsenal to rescue Philippine economy from COVID-19

ABS-CBN News

Posted at Mar 20 2020 04:45 PM

Residents of a depressed community in Bgy. Paligsahan, Quezon City receive food aid on March 19, 2020, with Metro Manila on lockdown due to COVID-19. The Bangko Sentral said it could deploy more measures to help revive the economy from the pandemic. Fernando G. Sepe Jr., ABS-CBN News

MANILA -- The Bangko Sentral ng Pilipinas said Friday it was prepared to deploy its full monetary and regulatory arsenal to help the economy recover from the COVID-19 pandemic.

The 50-point cut in the benchmark interest rate last Thursday is "appropriate" and the Monetary Board is monitoring the situation to determine if further reductions are warranted, the BSP said.

Citing its latest assessment, the BSP said the economic impact of the pandemic could last until the second half of the year with a rebound "expected" by 2021. The slowdown will hit tourism, trade and remittances, the central bank said.

"The BSP is prepared to use the full range of its monetary instruments and to deploy monetary policy and regulatory relief measures as needed in fulfillment of its price and financial stability objectives," the BSP said.

The central bank is ready with "supplemental actions" including recalibrating its interest rate corridor settings and suspending the term deposit facility, it said.

"Some measure of coordination" among the world's central banks is "warranted," the BSP said. "At the moment, some central banks have been conducting information exchange on how their jurisdictions currently cope with the situation, which has served as a learning platform for monetary authorities across the globe."

The Philippines is under a state of national calamity and the Luzon Islands, home to half the population, is on lockdown with people required to stay at home and transport systems shut for non-essential movements.

Average inflation for 2020 could slow to 2.2 percent from the initial projection of 3 percent due to the COVID-induced slowdown and falling oil prices, the BSP said.