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June 23, 2024

Outgoing BSP chief confident about sustained economic recovery

Outgoing ​Bangko Sentral ng Pilipinas Governor and incoming Finance Secretary Benjamin Diokno is optimistic that the Philippine economy will sustain its recovery as the country continues to post strong macroeconomic fundamentals.

“I can say with confidence that there will be no recession in the Philippines,” Diokno said when asked about warnings of a recession in the United States and its potential spillover to the rest of the world during a recent interview on BBC Asia Business Report.

The BSP chief said the country had been growing at around six to seven percent before the COVID-19 pandemic.

“The economy has recovered after a slowdown and contraction in 2020 – it bounced back to 5.7 percent last year. During the first quarter of this year, it grew by 8.3 percent, and there is a strong probability that we will hit seven to nine percent this year, as originally projected before the pandemic,” Diokno added.

The incoming head of the economic team of President-elect Ferdinand “Bongbong” Marcos Jr. cited the country’s hefty gross international reserves that can service import requirements for almost 10 months, the steady inflow of overseas Filipino remittances and business process outsourcing receipts, and the rise in foreign direct investments (FDIs).

To keep the Philippine economy on track, Diokno said the central bank will continue to focus on its mandate of promoting price and financial stability.

The BSP is supporting whole-of-nation efforts and game-changing reforms to further bolster the country’s ability to recover from the pandemic.

These significant reforms include the recently passed economic liberalization laws that will help open the country to more FDIs, thereby spurring job creation and fostering economic growth.

These laws are the amended Retail Trade Liberalization Act that will lower the minimum paid-up capital for foreign corporations to $500,000 from $25 million; the amended Foreign Investments Act that will allow foreign nationals to own a micro, small, and medium enterprise with a minimum paid-in capital of $100,000 subject to conditions; and the amended Public Service Act that will allow up to 100 percent foreign ownership of public services, such as telecommunications, railways, expressways, airports, and shipping industries.​