Need for better, safer and tech-savvy economy discussed
BSP Governor Diokno looks forward to a better, safer and tech-savvy new economy
MANILA – Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said the country’s economy has been affected by COVID-19.
“We have to look forward to a better, safer and tech-savvy new economy,” said Governor Diokno in his remarks during the first virtual GBED (Governor Benjamin E. Diokno) Talks for the year.
He said remains optimistic with their goal to convert 50% of digital transactions by the end of his term in 2023. Referring to the Philippine government’s PESONet and InstaPay, Governor Diokno said gained more subscribers during the enforcement of Enhanced Community Quarantine.
Governor Diokno noted an increase in both volume and value of transactions which rose by 18% in April from March.
“A significant growth rate took place in April where the ECQ was in effect which is three times that of the growth rate during the first quarter averaging only 6% in terms of volume and 5% in terms of value,” he added.
There was higher digital usage with 2.1 million transactions or an increase of 18% and by P64.6 billion or by 25% which brought the need for physical payment transactions appropriate under current circumstances.
As far as the banking system is concerned, Governor Diokno said it has remained the first line of defense of the country’s financial system amidst the COVID-19 pandemic. Governor Diokno said the domestic financial system remains bank-centric with total banking system assets accounting for 81.7% of the total financial system as of end February 2020.
He described the country’s banking system as “adequately capitalized and stable” to withstand the impact of the COVID-19 situation. Reforms have been put in place to maintain sufficient confidence in times of crisis as well as ensure business continuity to serve financial consumers and keep the economy going.
Governor Diokno said the Monetary Board has a lower inflation forecast range of 1.75 to 3.75% which is still within the baseline projections and the government’s inflation target range of 3% ± 1% for 2020 to 2022.
“We have put our house in order before the outbreak struck,” he added.
“The world economy is projected to recover as economic activity normalizes provided that appropriate mitigating policies are also put in place. Human behavior will determine the contour of the recovery,” he explained.
The former UP Economics professor said the impact of COVID-19 and the enforcement of containment measures are expected to “weigh down” on domestic growth for the year contributing the downside inflation pressures extension of the Enhanced Community Quarantine in some areas until May 15 will have a negative impact on domestic economic activity.
Governor Diokno also mentioned the slower global growth will affect investments and trade as well as overseas Filipinos’ remittances which will also affect domestic growth.
He sounded optimistic growth will eventually come after the lifting of community quarantine. (Melo M. Acuña)