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.
BSP Governor Benjamin Diokno said during the Citi 2022 Virtual Macro Forum that the Philippines was a good example of an economy with sound fundamentals when the COVID-19 pandemic struck.
“Economies with strong fundamentals tend to handle crises better,” Diokno said.
According to the BSP chief, 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,” Diokno said.
Diokno added that the country’s strong fundamentals were built through decades of continued implementation of structural reforms and sound macroeconomic management.
To ensure full economic recovery and maintaining long-term economic potential, Diokno said the next administration is required to implement 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 International Monetary Fund-World Bank Spring Meetings.
BSP Deputy Governors Francisco Dakila, Jr. and Chuchi Fonacier also joined Diokno during the open forum.