Gov’t prepares reforms to ensure PH economy emerges stronger from pandemic — Diokno

MANILA, Philippines — A slew of reforms currently being prepared by the government — including proposed laws that will help companies deal with bad debt — will help ensure that the Philippines emerges from the pandemic on firmer economic footing.

Thus said the head of the Bangko Sentral ng Pilipinas who stressed that policy makers are “exerting enormous effort to help the economy and the Filipino people survive” the coronavirus pandemic and for the country to emerge “better, stronger, more inclusive, technologically prepared and more competitive than before.”

Speaking via videoconference to members of the Bank Marketing Association of the Philippines, Governor Benjamin Diokno said the central bank is pushing for laws that will accelerate recovery and improve the structural makeup of the economy.

Among the laws the regulator are the Financial Institutions Strategic Transfer or FIST bill, which will help banks unload bad assets; the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery or GUIDE bill, which will provide assistance to distressed firms that are critical for economic recovery; amendments to the Agri-Agra law to rationalize the way banks can support agriculture development; amendments to bank secrecy laws to aid anti-money laundering and anti-tax evasion efforts, and promote integrity in governance; and amendments to the Credit Information System Act to ease credit access of micro, small and medium enterprises.

At the same time, the central bank chief said the regulator continues to refine monetary policy and banking regulations.

In relation to price stability, the BSP last month started issuing our own securities, as allowed under its recently amended charter — a policy that will help it better manage liquidity in the local financial system.

“On financial stability, we are committed to a dynamic regulatory environment that reflects an ever-changing landscape for our supervised entities,” Diokno said. “We will continue to refine regulations, taking into account good corporate governance, sound risk management, efficient financial intermediation, and effective customer service.”

To this end, the central bank is actively promoting financial technology, which helps speed up payments and capital turnaround and therefore boosts income and economic growth.

“My personal goal is that half of financial transactions in the country should be digital by 2023, the end of my term,” he said. “But with enabling regulations and the pandemic, this may be achieved sooner, perhaps by the end of 2022.”

Diokno noted that the latest economic indicators point to the country having reached an inflection point in the crisis.

“At this point, I can report that the worst is over,” he said. “While we’re not out of the woods yet, there has been progress as the economy gradually opens up from the strict lockdown in March to June to less stringent quarantine measures.”

We’re learning to live with the virus. Now, we’re at an inflection point.

JPV