THE Bangko Sentral ng Pilipinas (BSP) has welcomed the International Monetary Fund’s (IMF) latest Special Drawing Rights (SDRs) allocation, saying it is expected to provide additional liquidity amid the pandemic.
In a statement on Wednesday evening, BSP Governor Benjamin Diokno confirmed to reporters that the Philippines’s share in the SDR allocation amounting to SDR 1,958,027,771.00 was credited to the country’s SDR account.
“The BSP supports the IMF SDR allocation which will provide additional liquidity to member-countries particularly during this period as efforts are exerted to address the Covid-19 crisis,” Diokno said.
“We expect this to result in an increase in the country’s gross international reserves [GIR],” he added.
The IMF advised member-country authorities that the SDR allocation can be used to boost foreign exchange reserves and reduce reliance on debt, create space for countries to step up efforts against the crisis and support reforms to the economy.
The BSP also said IMF member-countries can exchange their SDRs for hard currencies with other IMF members. The newly allocated SDRs are reflected in the GIR until the national government determines its use.
Earlier this year, the IMF slashed their growth projection for the Philippines on Wednesday, citing slow recovery in the first half of the year.
Following the Philippines’s annual economic check-up from the IMF via its Article IV consultation this year, the global monetary authority cut its growth projection of the Philippines from 6.9 percent to 5.4 percent for this year.
What pulled the economy down in the first half of the year is largely the second wave of Covid-19 cases in the country, which likely peaked in April, IMF Article IV Consultation Mission Head Thomas Helbing told reporters in a virtual briefing.
The resurgence of cases during the period necessitated stricter quarantine measures which disrupted economic activity and “weighed” on market confidence, Helbing added.
While the IMF said the economy is expected to start its path to recovery toward the third quarter of the year, Helbing warned of pockets of uncertainty in the near-term recovery.