4 structural reforms key in post-COVID economy

The Philippines needs to undertake several key “structural reform initiatives” to prepare the economy for the post-pandemic environment that will look very different from what it was less than three months ago, according to the chief of the central bank.

Speaking before a business forum recently, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the country was fortunate to have entered the coronavirus pandemic from a “position of strength” but stressed that more work needed to be done if these advantages were to be properly used going forward.

At the top of the list of priorities is modernizing the country’s health system to ensure efficient public health infrastructure and resilient crisis preparedness framework.

“This would require giving incentives for the use of science and technology in health policy decision-making,” he said. “It would require overhauling of health care supply chain management.”

At the same time, the central bank chief earlier noted that regulators’ collective push for Filipinos to use more digital methods for their transactions helped the economy become more resilient despite the enhanced community quarantine scheme that has been in force for almost two and a half months now.

Despite this, there remains a need for massive upgrading of the country’s information and communications technology (ICT) infrastructure system and processes as technology will play a pivotal role in reshaping the means of production and the delivery of goods and services in the post-COVID world.

“The demand for digital technology will increase, driven by companies, schools and government agencies implementing work-from-home arrangements and virtual meetings,” Diokno said.

Digital technology will also be critical in enabling simpler and more efficient transactions with government agencies. Business transactions such as online retail, online banking, online medical consultations and digital payments will increasingly become a necessity. All these need to be supported by a safe and reliable digital infrastructure system with robust and dependable cybersecurity protection.

“Third is the modernization of Philippine agriculture and government’s supply chain management system with the aid of digital technologies,” he said. “This will help ensure that food and other essential goods and services are available, accessible and affordable.”

In particular, he pointed out that an efficient logistics system for agriculture facilitated the transport of agricultural inputs including farm equipment and machinery to farmers to keep food production uninterrupted.

Finally, Diokno said the country must develop a highly skilled and resilient workforce by strengthening the educational system, sustained “upskilling” and adequate health protection to future-proof our workforce.

“In this way, the country’s productive capacity can benefit more strongly from its favorable demographics,” he said, pointing to a United Nations report that showed the Philippines having one of the youngest labor force relative to other Southeast Asian countries and the rest of the world even until 2060. INQ