The Philippine central bank supports carefully coordinated action with the government including economic stimulus bills to avert a prolonged contraction caused by the coronavirus outbreak, Governor Benjamin Diokno said.
The record-high 17.7% jobless rate in April “does not reflect the true state of the economy and the jobs market” and was a result of the decision to save lives amid the pandemic, Diokno said in a statement on Saturday, a day after the latest labor data was released.
“A big part of the economy was shuttered; the consequent rise in joblessness was State-induced,” Diokno said, adding that he’s confident that the next jobs report will show “a starkly different picture.”
Diokno said the central bank’s “proactive and decisive monetary actions” were strategic in containing volatility and ensuring confidence in the financial markets, and avoiding further damage to the economy.
The Bangko Sentral ng Pilipinas has made significant contributions to the country’s virus relief efforts, helping funnel an estimated ₱1.1 trillion ($22 billion) into the financial system, Diokno said early this week. Monetary authorities have cut the benchmark interest rate this year by 125 basis points to 2.75%, lowered the ratio of funds lenders must hold in reserve by 2 percentage points, eased rules on bank capital and reserves, and deployed other measures to stabilize the bond market.
Diokno said the impact of the pandemic is broad-based and uneven across industries. “As job loss was uneven during the lockdown, so will job creation in the transition,” he said.
Construction and manufacturing can easily be restarted, while industries like tourism might take a longer time to restart, the central bank chief said.