Talks with multilateral banks focus on potential recovery measures, MSME aid

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THE Bangko Sentral ng Pilipinas (BSP) said its talks with various multilateral agencies, aid organizations and central banks are focused on potential projects to bring about an economic recovery and aid small businesses.

“From IMF (International Monetary Fund), the World Bank and ADB (Asian Development Bank) we have two common concerns, one — how to support the country amid the ongoing health crisis, and two — how to mitigate the carryover effects of the crisis,” BSP Governor Benjamin E. Diokno told reporters in an online briefing Thursday.

“Support for MSMEs (micro-, small, and medium-sized enterprises), that’s particularly important because MSMEs account for about two-thirds of our labor force,” he said.

According to the Department of Finance, the Philippines has raised $7.63 billion in budgetary support financing from multilateral agencies like the World Bank, the ADB, and others.

The BSP is involved in the Chiang Mai Initiative Multilateralization process, a regional financing arrangement for ASEAN, China, Japan, and South Korea, which makes available funding to mitigate shocks. The agreement was amended in June, strengthening currency swap arrangements and financial safety nets.

Asked whether the Philippines is looking to avail of any currency swaps, Mr. Diokno said: “Short answer is no. Why? Because our external position is good. We have adequate buffers against global risks and shocks.”

The balance of payments (BoP) was in surplus by $2.431 billion in May, wider than the year-earlier surplus of $928 million and the $1.666-billion surplus in April. Year to date, the BoP was in surplus by $4.03 billion, against the $5.19 billion surplus a year earlier.

Gross international reserves rose to record $93.32 billion at the end of June, exceeding the $90 billion target set for the year.

“We have sufficient self-insurance against the potential BoP problem and there is no compelling reason at this time to tap from available facilities,” he said.

The BSP has a current bilateral swap arrangement with the Bank of Japan.

Mr. Diokno said the BSP and Indonesia’s Financial Services Agency are in dialogue on supervisory frameworks, consumer protection, financial inclusion, financial technology, and capacity building.

It is also in talks with the Monetary Authority of Singapore on cross-border financial industry data connectivity. — Luz Wendy T. Noble