BSP says ‘no apparent, immediate need’ for new IMF credit line

MANILA — Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Tuesday there was “no apparent and immediate need” to avail of one of the International Monetary Fund’s lending tools since the Philippines was entering the COVID-19 pandemic from a “position of strength.”

Diokno was refering to the Short-term Liquidity Line or SLL, a new facility directed at member-countries’ coronavirus response.

The peso is “strong” and gross international reserves are at a “healthy” level of $89 billion (P4.5 trillion) as of end-March, Diokno said.

The size of debt relative to the economy is “manageable” and the balance of payments surplus was at a 7-year high at the end of last year,” he said.

“As I said before, structural reforms and sound economic management have helped the Philippines enter the COVID-19 crisis from a position of strength,” he said.

The Philippines on May 16 started a slow easing of a 2-month old lockdown in Metro Manila and other urban centers as it projected that the restrictions would cause a 2 to 3.4-percent contraction in gross domestic product this year.

First quarter GDP shrank unexpectedly to 0.2 percent and the succeeding 2 quarters are expected to be worse before a rebound in the fourth quarter.

On Monday, Japan and Thailand said their economies were in a recession, technically defined as 2 successive quarters of contraction.