MANILA - The Philippines will "do everything" to avoid an economic recession due to the COVID-19 crisis, central bank governor Benjamin Diokno said Sunday.
BSP Governor Benjamin Diokno said the Monetary Board has authorized him to reduce the reserve requirement ratio for banks by 500 basis points and that he has so far cut it by 200 basis points.
"We’ll do everything so we can avoid a recession in the Philippines. So, we’ll do both fiscal and monetary policy," he told ANC.
"We’ll try to avoid it as much as possible. You know, we have 84 quarters of continuous growth since the Asian financial crisis. I think the Philippines is resilient enough. I think, if we do the right thing, we can avoid a recession."
Early last week, Socio-economic Planning Sec. Ernesto Pernia, who is also director general of the National Economic Development Authority, said gross domestic product could register negative growth of 0.6 percent to an expansion of 4.3 percent, depending on how long the lockdown of Luzon will last.
The Philippine economy last contracted, by 0.6 percent, in 1998 during the Asian financial crisis, according to ABS-CBN Data Analytics.
Diokno said that while GDP for the current quarter could remain positive at around 3 percent, it is forecast to go negative in the 2nd and 3rd quarters, before picking up in the 4th quarter.
Inflation is projected at 2.4 percent in March, from 2.6 percent last month, he added.
"Food prices are fairly stable. Plus, with the price freeze, I think we’re very comfortable with the inflation at the moment," he said.
Diokno said he expects economic activity to resume in the second quarter.
"We’re okay. We still have long ways to go. I don’t expect this to last. This is temporary. Maybe things will be back to normal in a month or 2 months’ time," he said.
He also said that the country can rely for now on the assistance of $1.5 billion from the Asian Development Bank.
Diokno again assured that the central bank has "a lot of money already printed."
"The plant continues to operate as needed. We have one shift, we'll ramp it up next week moving forward," he said.
Philippine banks have ensured the public that enough cash would be available during the month-long lockdown which is in effect until April 12. Diokno earlier urged the public to use e-payments and digital banking to reduce the risk of COVID-19 infection.
The Luzon-wide lockdown, imposed to contain the spread of the coronavirus disease 2019 (COVID-19), prohibits people from going to their workplaces, prompting many business operations to temporarily shut down.
Congress has approved P275 billion for government to address the basic needs of the affected vulnerable population.