AFTER bouts of aggressive monetary policy measures to lift the economy from the sinking effects of the pandemic, the Bangko Sentral ng Pilipinas (BSP) is now rallying to support the passage of laws that will help in the “whole of government” approach to post-pandemic recovery.
Speaking at the recent Pilipinas Conference Virtual Forum organized by Stratbase Albert del Rosario Institute, BSP Governor Benjamin Diokno expressed strong support for pending legislation that will help keep the economic growth momentum after the disruption caused by Covid-19.
Diokno particularly cited four pending measures.
“First, the Bayanihan law which features the expansion of credit and rediscounting facilities to affected MSMEs in the agriculture, infrastructure and manufacturing sectors of the economy by two government financial institutions, for which equity support and guarantee facilities will be provided,” Diokno said.
Just last week, economic managers announced that they are still assessing the Bayanihan 3’s impact on the country’s fiscal health.
“Second, the ‘Financial Institutions Strategic Transfer’ [FIST] bill, which seeks to help financial institutions offload their pandemic-induced nonperforming assets through special purpose vehicles. This would enable banks to continue serving the financial needs of borrowers,” Diokno said.
“Third, the ‘Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery’’ Act or the GUIDE bill, which enables the creation of a special investment vehicle that would infuse capital into key enterprises with provision for employment preservation,” he added.
As of this writing, the FIST bill has been put on the House of Representatives’ list of economic bills under priority agenda while the GUIDE bill is still under plenary deliberation.
“Lastly, the proposed Corporate Recovery and Tax Incentives for Enterprises [CREATE] Act, which proposes an immediate across-the-board cut in corporate income tax [CIT] rate for all firms from 30percent to 25 percent followed by a 1-percentage point annual cut from 2023-2027 to bring down CIT to 20 percent by 2027,” Diokno said.
On Thursday (November 26), the Senate passed the CREATE bill on third and final reading.
Diokno also reiterated that despite their aggressive moves to keep the country’s monetary policy accommodative during the pandemic, they are still prepared to implement measures if needed.
“The BSP has far from exhausted the instruments in its policy toolkit, and it stands ready to recalibrate or deploy additional measures, in line with its mandate to maintain price and financial stability,” Diokno said.