The Monetary Board said Monday it authorized the Bangko Sentral ng Pilipinas to purchase P300 billion worth of government securities from the Bureau of Treasury under a repurchase agreement with a maximum repayment period of six months to support the Filipino people during the COVID-19 pandemic.
It said in a statement the fund to be generated from the agreement would be used to support the government’s programs to counter the impact of COVID-19 to the economy in general.
“We continue to support the government’s initiatives and objectives during the enhanced community quarantine. This additional amount is intended to provide support for those most affected by the ECQ, especially in Luzon, for the next 60 to 90 days,” said BSP Governor Benjamin Diokno.
“Rest assured that the BSP, in coordination with the relevant government agencies, will continue to fulfill its mandate with the benefit of the Filipino people in mind,” he said.
National Treasurer Rosalia de Leon said the arrangement “is the most cost-effective way for us to provide an extra lifeline to the national government to support the programs to fight this pandemic.”
The Duterte administration’s economic team announced last week the rollout of a P27.1-billion package of priority actions to help frontliners fight the 2019 coronavirus disease pandemic and provide economic relief to people and sectors affected by the slowdown in economic activity.
Finance Secretary Carlos Dominguez III, who chairs the Duterte Cabinet’s Economic Development Cluster, said the measures in the package are designed to ensure that funding is available for the efforts of the Department of Health to contain the spread of COVID-19 and provide economic relief to those whose businesses and livelihoods have been affected by the spread of the disease.
“As directed by President Duterte, the government will provide targeted and direct programs to guarantee that benefits will go to our workers and other affected sectors. We have enough but limited resources, so our job is to make sure that we have sufficient funds for programs mitigating the adverse effects of COVID-19 on our economy,” he said.
The fiscal support package crafted by President Duterte’s economic team includes the mobilization of an additional P3.1 billion to contribute directly to efforts to stop the spread of COVID-19, including the acquisition of test kits.
Dominguez also said the government would go ahead with regular budgeted expenditures, as accelerated government spending was now even more necessary to stimulate economic activity and provide direct support to vulnerable groups and individuals.
“The country and the government have all the tools—medical, financial and monetary—to successfully handle this situation,” he said.
The state economic managers reassured the public that the impact of COVID-19 on the government’s key programs was expected to be limited.
Economic Planning Secretary Ernesto Pernia said the one-month community quarantine of the National Capital Region might have a transitory impact on the economy, but should be closely monitored for necessary adjustments.