BSP sees U-shaped economic recovery amid Covid-19 impact

The Bangko Sentral ng Pilipinas (BSP) now forecasts a U-shaped economic recovery, expecting the impact of Covid-19 to last until the second half of 2020, with a rebound anticipated by 2021.

The services sector, including tourism and trade, is expected to be significantly affected by the global pandemic.

Economic managers estimate the domestic economic impact of Covid-19 this year to be around 0.3-1.0 percentage point, with the growth target set between 6.5-7.5 percent.

The BSP's Monetary Board recently cut key policy rates by 50 basis points, bringing the total rate cut for 2020 to 75 basis points.

The BSP's overnight reverse repurchase (RRP) facility rate is now at 3.75 percent, the lowest since July 2014.

Monetary officials are prepared to utilize a full range of monetary instruments and regulatory relief measures to ensure price and financial stability.

The BSP will continue to monitor the situation to determine if further rate reductions are warranted, and is considering other measures to support liquidity and lower borrowing costs.