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The deputy governor of Bangko Sentral ng Pilipinas (BSP), Francisco Dakila Jr., reiterated that the country’s monetary authorities are committed to implementing policies that support the economic recovery of the Philippines.
During the Manila Times 122nd Anniversary Economic Forum held on Tuesday, Dakila said that the uncertainty surrounding the evolution of the coronavirus disease 2019 (Covid-19) remains even as the economy gradually recovers from the worst of the crisis.
“Therefore, the BSP is prepared to use the full range of monetary instruments and to implement monetary policies and regulatory relief measures as necessary to meet its financial and price stability objectives,” he emphasized.
At present, Dakila said that the central bank continues to implement policies aimed at supporting the economic recovery, while remaining consistent with its mandate to maintain financial and price stability.
These policies, he added, include in particular the reduction of the central bank’s policy rate by 175 basis points accumulated so far this year. The reduction brought the overnight reverse buyback rate to its lowest level, 2.25 percent.
Dakila also highlighted the repurchase agreement entered into by BSP with the national government. In March, Bangko Sentral bought P300 billion in government securities from the Treasury Office, which was already liquidated by the government on September 29.
This was followed by another P540 billion in a new interim advance from the national government to the central bank, to use as budget support amid the Covid-19 pandemic.
Dakila also highlighted the reduction of the reserve requirement ratio of universal and commercial banks by 200 basis points to 12 percent in March. The reserve requirement is the ratio of current deposits that banks must hold with the central bank against the amount they can lend to borrowers.
“Later, BSP also implemented specific liquidity and lending operations,” he added, noting that Bangko Sentral now allows loans to micro, small and medium-sized companies to be part of meeting reserve requirements by banks.
The central bank also participated in the secondary market for government securities to provide liquidity in financial markets, ease the tightening of financial conditions and maintain the flow of credit in the economy, the BSP official also said.
To reinforce this, he added, Bangko Sentral initially reduced the bid volume on the overnight reverse repurchase facility, suspended the auctions of the term deposit facility for certain terms, temporarily reduced the term margin of the discounted loans by pesos in relation to the zero-day interest rate, and sent dividends in advance of 20,000 million pesos to the national government.
“During this emergency, the BSP acted aggressively using monetary policy and launching various liquidity improvement measures to mitigate the economic and financial consequences of the Covid-19 pandemic, in addition to complementing the fiscal response of the national government,” said Dakila.
Despite this, he said county monetary authorities “continue to see the need for a careful balancing act between opening up the economy to restore lost livelihoods while ensuring that minimum health standards are maintained for prevent subsequent waves of infection from overwhelming our health. care system “.
The forum, titled “Regroup and Heal: Better Heal,” was co-hosted by InfiniVAN, NOAH Business Applications and Vista Land.
The sponsors were BDO Unibank Inc., Mazars, Suntrust and PHirst Park Homes and their media partner TMT TV. Special partners include Lobien Realty Group, Maybank and Sante, while the organization’s partners are the British Philippine Chamber of Commerce, the Philippine Institute of Financial Executives, and the Philippine Management Association.
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