BANGKO Sentral ng Pilipinas Gov. Benjamin Diokno said Tuesday dollar remittances this year could shrink due to the coronavirus pandemic, adding he would do “whatever it takes” to support the economy.
Business process outsourcing receipts — expected to grow two percent this year from the previous forecast of five percent — will partly make up for the decline in remittances, Diokno said.
The projected decline in remittances is “not a major blow to our external position,” Diokno said. “We still expect a positive balance of payment position,” he said.
The economy is in a “position of strength” to respond to the coronavirus pandemic, as affirmed by a recent credit rating upgrade, Diokno said.
The Japan Credit Ratings Agency’s “A-” rating for the is a “significant achievement in a sea of downgrades,” he said.
“We’re not out of the woods yet. We continue to be careful, we continue to be watchful of the developments. We plan to do whatever it takes to make sure there is no permanent scar on the Philippine economy and society,” he said.
The Monetary Board will meet again on June 25. Diokno has so far cut the overnight borrowing rate used by banks to price their loans by 125 basis points this year, 100 of which was delivered during the 11-week lockdown.
Diokno also has authority from the Monetary Board to match the 200-basis point cut in the RRR or reserve requirement ratio for banks that he delivered this year.
The Philippines is expecting the economy to shrink by two to 3.4 percent this year after the virus lockdown caused the first quarterly contraction in 22 years, recorded in the January to March period.
Unemployment in April soared to a record 17.7 percent, causing the total number of jobless Filipinos to swell to 7.3 million.(ABS-CBN News)
