DOF chief underscores importance of coordinated fiscal and monetary response

Finance Secretary Benjamin Diokno underscored the importance of close coordination between fiscal and monetary authorities and the commitment to the Medium-Term Fiscal Framework (MTFF) in ensuring post-pandemic resilience during the 6th International Monetary Fund-Japan International Cooperation Agency (IMF-JICA) Joint Conference on February 14, 2023 in Tokyo, Japan.

With the theme “Recovery from the Pandemic in Developing Asia: Achieving Inclusive and Sustainable Growth with Sound Fiscal Management”, the conference brought together Ministers, Central Bank Governors, and academics to engage in discussions on policy responses during the pandemic and new challenges for inclusive growth in developing Asia.

Secretary Diokno served as a panelist during a high-level roundtable discussion with Bank of Mongolia Governor Lkhagvasuren Byadran and JICA Executive Senior Research Fellow Tetsuya Harada, moderated by IMF’s Asia Pacific Department Director Krishna Srinivasan.

During the roundtable, Secretary Diokno shared the Philippine government’s fiscal and monetary response to battle the pandemic and the government’s commitment to the MTFF in order to sustain growth and manage debt.

As part of the government’s four-pillar socioeconomic strategy against COVID-19 implemented at the beginning of the pandemic, liquidity enhancing monetary measures to keep the economy afloat amounted to US$28.6 billion or 7.3 percent of gross domestic product (GDP).

Secretary Diokno also mentioned that the Bangko Sentral ng Pilipinas (BSP) provided short-term provisional advances to the National Government to support the country’s fiscal needs during the pandemic. This has since been fully settled.

As the Philippines, along with other countries, navigates new challenges to global growth, the government will strictly implement the MTFF, which aims to bring down the debt-to-GDP ratio to less than 60 percent by 2025 then further down to 51.1 percent in 2028, and reduce the budget deficit to 3.0 percent of GDP by 2028.

Furthermore, Secretary Diokno cited the government’s game-changing fiscal and economic reforms that shielded Filipinos from the worst immediate impacts of the pandemic.

The government’s revenue agencies are also continuously implementing digitalization efforts to ensure efficiency in revenue collection.

In pursuit of an investment-led growth, the government will harness the public-private partnerships mechanism to augment the massive “Build Better More” infrastructure program of the Marcos administration.

Secretary Diokno also mentioned the government’s commitment to ramping up spending in education to empower the Philippines’ young, highly-skilled, and tech-savvy workforce.