Diokno brushes aside recession concerns

BSP Governor Benjamin Diokno (INQUIRER FILE PHOTO)

MANILA, Philippines — Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said there would be no repeat in the Philippines of the pandemic-driven recession, reiterating this amid warnings of possible spillover effects of a faltering economic recovery and downturns in developed markets, especially the United States.

At the same time, Diokno said the BSP was continuing to focus on efforts that promote the stability of prices and the financial system in the Philippines.

The BSP chief made this assurance after dropping hints that another increase in the regulator’s overnight borrowing rate may be expected at the next policy meeting in June.

“I think I have signaled that we are probably inclined to have another 25 bps adjustment on our next Monetary Board meeting, which is on June 23,” Diokno said earlier.

Strong fundamentals

On Monday, he maintained optimism that the Philippine economy will sustain its recovery as the country continues to post strong macroeconomic fundamentals.

“I can say with confidence that there will be no recession in the Philippines,” the BSP governor said in a statement, noting that the economic team has their eyes on getting back to a prepandemic growth rate of 6 to 7 percent.

Rebound

“The economy has recovered after a slowdown and contraction in 2020 — it bounced back to 5.7 percent last year,” he said. “During the first quarter of this year, it grew by 8.3 percent, and there is a strong probability that we will hit 7 to 9 percent this year, as originally projected before the pandemic.”

Diokno also cited the country’s gross international reserves that can service import requirements for about 10 months, the steady inflow of overseas Filipino remittances and business process outsourcing receipts, and the rise in foreign direct investments.

Also, Diokno anticipated a positive impact of the results of the recent polls, which resulted in the election of a majority president, as well as the election of a president and vice president from the same ticket.

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