The Bangko Sentral ng Pilipinas (BSP) underscored the importance of strengthening economic fundamentals during periods of relative stability to develop buffers in times of crisis.
“Economies with strong fundamentals tend to handle crises better,” said BSP Governor Benjamin E. Diokno during the recent Citi 2022 Virtual Macro Forum held via Zoom.
Governor Diokno cited the Philippines as a good example of an economy with sound fundamentals when the COVID-19 health crisis struck.
According to the Governor, the economy entered the pandemic with healthy external accounts and hefty gross international reserves, which helped maintain relative order in the financial markets amid the crisis.
“The Philippine economy is much stronger now than before. Right now, our foreign debt is 30 percent foreign and 70 percent domestic, and we have hefty gross international reserves,” the Governor said.
He pointed out that the country’s strong fundamentals were built through decades of continued implementation of structural reforms and sound macroeconomic management.
Moreover, the Governor emphasized that ensuring full economic recovery and maintaining long-term economic potential would require the implementation of recent hard-won economic reforms, such as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law and the amendments to the Foreign Investments Act, Public Services Act and Retail Trade Liberalization Act.
The Citi 2022 Virtual Macro Forum is a series of roundtable discussions with financial market participants structured around the IMF-World Bank Spring Meetings. Deputy Governors Francisco G. Dakila, Jr. and Chuchi G. Fonacier also joined the Governor during the open forum.