BSP pushes post-COVID reforms with private sector

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) said there is a need to modernize the country’s health, agriculture and government’s supply chain management systems as well as upgrade information and communications technology infrastructure to survive the economic fallout due to coronavirus disease 2019 or COVID-19 pandemic.

In his keynote address during the virtual forum titled “Rethinking growth post COVID-19” organized by the Makati Business Club, BSP Governor Benjamin Diokno said structural reform imperatives are crucial to have profound impact on the realization of the policy thrusts undertaken by monetary authorities to soften the blow of the health crisis.

Diokno said there is a need to modernize the country’s health system by giving incentives for the use of science and technology in health policy decision-making to ensure efficient public health infrastructure and resilient crisis preparedness framework.

“It would require overhauling of healthcare supply chain management. The government must also initiate the formulation of a national preparedness and response framework for disease outbreaks and pandemics, taking into account coordination gaps across different levels of government,” he said.

The BSP chief said the modernization of the country’s agriculture and government’s supply management system with the aid of digital technologies would ensure that food and other essential goods and services are available, accessible and affordable.

“Consequently, it will ensure that farm produce reaches the markets and are made available to Filipino consumers and provide Filipino farmers their rightful share in the gains from production,” he said.

Diokno also stressed the need for massive upgrading of the information and communications technology infrastructure system and processes as demand for digital technology is expected to increase, driven by companies, schools, and government agencies implementing work from home arrangements and virtual meetings.

“Technology will play a pivotal role in reshaping the means of production and the delivery of goods and services in the post-COVID world,” he said.

He also cited the need to develop a highly skilled and resilient workforce as the country has one of the youngest labor force relative to Southeast Asian and the rest of the world until 2060 with a median age of 25.7 years old versus the global average of 30.9 years old.

The BSP chief said crisis response measures adopted by monetary authorities include the 125 basis points cut bringing the interest rate to an all-time low of 2.75 percent so far this year, the lowering of the reserve requirement ratio by 200 basis points to 12 percent to free up P200 billion into the system, the P300 billion repurchase program entered into with the Bureau of the Treasury, among others.

“When the coronavirus crisis arrived, the government had and continues to have adequate fiscal and monetary policy space, which it immediately deployed to calm down the market and ease liquidity pressures. On its part, the BSP promptly implemented measures to ease liquidity, and sustain flow of credit that have

For his part, BDO Unibank president and chief executive officer Nestor Tan said the country’s largest lender is supporting the measures implemented by the BSP to help cushion the impact of the COVID-19 pandemic.

“The government is working as one in solving the crisis and the private sector is willing to do their part,” Tan said.

Tan added there is a need to reopen businesses soon while productive capacity is still largely intact since the imposition of the enhanced community quarantine since March 16 to prevent further spread of the deadly disease.

Tan noted a slowdown in the take up of loans as borrowers are taking a more cautious approach as the month-long lockdown has already been extended twice.