PH ready for risks and challenges to economic recovery

Governor Benjamin E. Diokno of the Bangko Sentral ng Pilipinas

Finance Secretary Benjamin Diokno said that the Philippines is fully prepared to address risks and challenges that threaten its economic recovery.

“We have a comprehensive set of interventions to effectively balance the need to sustain growth momentum while containing inflationary pressures and their cascading effects on the economy,” said Secretary Diokno before fellow leaders at the Global Economy session of the 3rd G20 Finance Ministers and Central Bank Governors Meeting.

The G20 or Group of Twenty is an intergovernmental forum that works to address global economic issues, including international financial stability, climate change mitigation, and sustainable development.

It is composed of 19 countries plus the European Union, which, together, comprises the world’s largest economies, accounting for around 60 percent of the world’s population, 80 percent of global gross domestic product (GDP), and 75–80 percent of international trade.

The Philippines is not part of the G20, but was invited to participate as a guest nation by the Government of Indonesia, the current chair and president of the group.

The Global Economy session was the first in a series of discussions covering various topics, including, global health, international financial architecture, financial sector issues, sustainable finance, infrastructure, and international taxation.

Responding to issues raised on risks to financial stability and rising inflationary pressures, Secretary Diokno cited the government’s effort to increase agricultural output and importation of certain commodities to stabilize supply and prices of food.

He said that targeted subsidies have been allocated to cushion the impact of rising fuel prices on the public transport sector.

He added that the Bangko Sentral ng Pilipinas (BSP) has been decisive in undertaking the necessary monetary policy actions to arrest the rise of inflation.

“With these policy instruments and a Medium-Term Fiscal Framework in hand, we are confident that the pains brought by ongoing shocks will be short and our recovery will remain robust,” the Secretary explained.

The government’s Medium-Term Fiscal Framework (MTFF) is aimed at reducing the deficit, promoting fiscal sustainability, and enabling robust economic growth. It contains near-term and medium-term strategic plans for socioeconomic development, which will be presented in detail to the public by President Marcos, Jr. in his first State-of-the-Nation Address (SONA).

To demonstrate the country’s bright economic prospects, Secretary Diokno said during the meeting that the Philippines is projected to post the highest growth rate in the ASEAN+3 region this year and in 2023.

The ASEAN+3 Macroeconomic Research Office (AMRO) revised upwards its 2022 economic growth projection for the Philippines from 6.5 percent to 6.9 percent of GDP, based on its July quarterly update of the ASEAN+3 Regional Economic Outlook (AREO) Report. For 2023, AMRO kept its growth forecast for the Philippines at 6.5 percent.

“Rest assured, the Philippines will contribute all it can to support the ongoing efforts of the G20 countries in implementing exit strategies and appropriate fiscal and monetary tools to secure a sustainable global economic recovery,” said Secretary Diokno.