BSP governor highlights PHL’s bid toward ‘New Economy’ before foreign business groups

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno highlights the Philippine economy’s robust medium-term growth prospects before foreign business groups.

In a presentation during the 6^th Joint Economic Briefing organized by various foreign business chambers, Governor Diokno said the Philippine economy is on the mend and cited the government’s growth projection of 6.0 to 7.0 percent this year and 7.0 to 9.0 percent next year.

Diokno cited several economic green shoots that have emerged, including:

-45.1-percent surge in net inflows of foreign direct investments (FDIs) in the first quarter of the year;

-65.6-percent increase in investment applications approved by the Board of Investments (BOI) and the 53.9-percent rise in investment plans approved by the Philippine Economic Zone Authority (PEZA) also in the first quarter;

-drop in the unemployment rate from the record 17.6 percent in April last year to 7.7 percent in May 2021;

-increase of the Purchasing Manager’s Index (PMI)  to 50.8 in June;

-19-percent growth in exports; and the 21.9-percent growth in imports in January to April this year, among others.

The event was held amid the Philippine government’s push to build back better, such as by attracting more job-generating investments. Diokno said the Philippines is aiming for a “New Economy” once the pandemic is over.

“[W]e do not simply aim to recover. In the post-COVID era, we want to be stronger, more technologically advanced, and more inclusive than ever before,” Diokno said.

Among the BSP’s efforts toward the New Economy is the promotion of financial digitalization, which helps to accelerate economic growth and to expand access of the masses to financial products and services.

The BSP aims to have, by 2023, at least half of financial transactions in the country done digitally and for at least 70 percent of the country’s adult population to have financial accounts.

Also, in line with the goal of having a “New Economy”—and consistent with the Philippines’ commitment under the UN Framework Convention on Climate Change to reduce projected carbon emission by 75 percent by 2023—Governor Diokno highlighted the BSP’s efforts toward sustainable economic development.

These include regulations on sustainability that banks must comply with and the BSP’s participation in various regional and international fora on sustainability for capacity-building purposes.

The BSP also launched the Sustainable Central Banking Program, an internal program that fosters environmentally responsible and sustainable policies and work practices within the BSP.

Moreover, the BSP invested $350 million in the Green Bond Fund launched by the Bank for International Settlements (BIS) as part of sustainable investing on reserve management.

The foreign chambers that co-organized the event included the following: Advantage Austria; Australian – New Zealand Chamber of Commerce; British Chamber of Commerce of the Philippines; Dutch Chamber of Commerce in the Philippines; European Chamber of Commerce of the Philippines; French Chamber of Commerce and Industry in the Philippines;  German-Philippine Chamber of Commerce and Industry; Nordic Chamber of Commerce of the Philippines; Philippines-Swiss Business Council (PSBC); Polish Investment and Trade Agency (PITA); and Spanish Chamber of Commerce in the Philippines (La Camara).