BSP injects P300B to aid economy amid COVID-19

The Bangko Sentral ng Pilipinas (BSP) is injecting P300 billion into the economy through the purchase of short-term government bonds to combat the effects of the COVID-19 pandemic.

This stimulus program aims to support government initiatives and provide aid to those most affected by the enhanced community quarantine (ECQ) for the next 60 to 90 days.

The BSP's Monetary Board has authorized officials to buy Bureau of the Treasury (BTr) government securities under a repurchase agreement with a maximum repayment period of six months.

This measure is seen as a cost-effective way to provide additional support to the national government's programs against COVID-19.

The injection of liquidity into the financial market is expected to help keep interest rates stable.

This action is in addition to previous monetary easing measures, including significant policy rate cuts and adjustments to the rediscounting window.

Analysts suggest the BSP has ample room for further easing if necessary to support businesses and individuals during the ongoing crisis.

The repurchase agreement may also help fund the government's planned fiscal rescue package.