An accelerated vaccination campaign for Covid-19 and limiting the spread of the virus will help ease the long-term “economic scars” in the Philippine economy, the Bangko Sentral ng Pilipinas (BSP) said on Monday.
“For the Philippines, we can minimize long-term economic scars and see a faster economic recovery if we could accelerate vaccine deployment and limit widespread community transmission of the different variants of Covid-19,” BSP Governor said Benjamin Diokno during international research. 2021 conference organized by the BSP and the Reinventing Bretton Woods Committee (RBWC).
To curb the spread of Covid-19, the government imposed quarantine restrictions that caused the economy to contract 9.6% in 2020.
While the economy grew by more than 11% in the second quarter of the year, the gross domestic product (GDP) for the first half at constant prices, which stands at 8.9 trillion pesos, is still down by 6% from pre-pandemic level. level of 9.4 trillion pesos in the first half of 2019.
To help the economy recover, the government is stepping up efforts to vaccinate the entire adult population before the end of the year.
However, data showed that as of September 26, only 20.30 million people had been fully immunized.
Diokno, however, believes the country’s monetary and fiscal policy space will help the country recover from the pandemic.
âUnlike past crises, we have both the monetary and fiscal policy space needed to stimulate recovery from the economic recession induced by Covid-19,â he said.
He acknowledged, however, that the current political space is not unlimited.
“In our case, although our monetary and fiscal space is ample, we are aware that our current political space is not unlimited. Therefore, at every step of the process, we at PASB maintain an open and effective dialogue with our counterparts in government, the private sector and society at large, âsaid Diokno.
The BSP Monetary Board earlier decided to keep policy parameters at record levels.
Overnight borrowing, lending and deposit rates remained at 2.00 percent, 1.50 percent and 2.50 percent, respectively.
Diokno said earlier that the Monetary Council believes the current monetary policy parameters remain appropriate given the manageable inflation environment and uncertain growth prospects.
“The Monetary Board reiterates that, with appropriate fiscal and health interventions, keeping a firm hand on the political levers of the BSP will allow the momentum for economic recovery to gain ground by helping to boost domestic demand and market confidence. “said Diokno.
The Monetary Board also noted that the prospects for recovery continue to depend on timely measures to avoid deeper negative effects on the Philippine economy. To this end, the acceleration of the government’s vaccination program and a recalibration of the protocols of Existing quarantines will be essential to support economic activity while safeguarding public health and well-being, âhe added.