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Prolonged Pandemic a Key Risk Factor to PH Economy

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Key Points

  • One of the main risk factors that could disrupt the recovery of the Philippines from its worst economic recession in documented history is the likelihood of a long-drawn-out pandemic—a risk that could be mitigated by stressing better government measures.
  • To date, the BSP has done the majority of the heavy lifting in terms of the government’s response to the public health crisis, pouring into the local economy through a slew of measures in an approximate P1.3 trillion since the pandemic started in March.
  • Diokno also noted that the potentially tepid global economic rebound was also a risk to the recovery of the Philippine economy.
  • Visit The Financial Today’s homepage for more stories.

One of the main risk factors that could disrupt the recovery of the Philippines from its worst economic recession in documented history is the likelihood of a long-drawn-out pandemic—a risk that could be mitigated by stressing better government measures.

Thus the head of the Bangko Sentral ng Pilipinas (BSP) said during ongoing budget deliberations as he briefed lawmakers on the state of the country’s economy on Wednesday.

“While the economy hit rock bottom, we are now on the road to a gradual recovery. However, we recognize the risks along the way,” PH central bank chief Benjamin Diokno said. “First, the possibility of a prolonged pandemic.”

He noted that the end of the global health crisis—which has infected more than 241,000 Filipinos and caused 3,916 local deaths so far—remained unclear and a prolonged pandemic will continue to damage the economy’s health and economic sectors.

“Nonetheless, improved stra­tegies to strengthen the health sector, the passage of Bayanihan Act 2 and other legislative measures to support the economy, and targe­ted social reforms and sustained implementation of infrastructure program, will help smoothen and balance the road to recovery,” the central bank chief said.

To date, the BSP has done the majority of the heavy lifting in terms of the government’s response to the public health crisis, pouring into the local economy through a slew of measures in an approximate P1.3 trillion since the pandemic started in March.

Diokno also noted that the potentially tepid global economic rebound was also a risk to the recovery of the Philippine economy.

“No two countries are alike,” he said. “Each country is at different points of the epidemiological curve.”

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