PH prepared for geopolitical risks and shifting economic landscape

Finance Secretary Benjamin Diokno is confident that the economy can weather the implications of current geopolitical events and post-pandemic changes in the international financial system, as he stresses the importance of heightened attention to these issues.

“Amidst the ever-changing and challenging economic landscape, I am confident that the [Bangko Sentral ng Pilipinas (BSP)] will continuously sharpen its tool kit, search for opportunities, and implement game-changing reforms and regulations to maintain the stability of our financial system,” said Secretary Diokno.

Secretary Diokno was giving the closing remarks at the first run of the BSP-University of the Philippines School of Economics (UPSE) Distinguished Lectures Series on Friday (July 18), when he recognized BSP’s competence to respond to economic events.

Secretary Diokno was BSP governor from 2019-2022 before assuming the role of Secretary of Finance.

“Given my recent stint as BSP Governor for the past three years, I am well aware that the men and women of the BSP are very capable in responding where it matters and when it matters,” said Secretary Diokno.

Professor Thorsten Beck, who was the distinguished lecturer during Monday’s session, raised issues on the rise in fintech companies and the greening of the financial system.

Beck, who is a professor of Financial Stability at the Robert Schuman Centre for Advanced Studies, European University Institute, also identified in his lecture geopolitical risks that may impact economies.

These risks include, among others, the ongoing Russia-Ukraine conflict, withdrawal of European banks from Russia, demand-driven global energy crisis, tightening of the US monetary policy, cross-border banking, and China’s role as creditor for fragile emerging markets and developing economies (EMDEs).

Secretary Diokno said that these issues have important effects not only for the central bank and the financial system but also for the entire economy.

He said that the lecture is useful in informing how the government can better shape the landscape of the country’s monetary and fiscal policy.

“In my capacity as Secretary of Finance, I and the economic team will remain steadfast on the risks identified by Professor Beck. The learnings we had today are useful inputs as we improve our medium-term fiscal consolidation framework to build on the current reform momentum and lead the economy towards a more inclusive growth,” said Secretary Diokno.