Delta variant, another challenge to PH financial stability

The possible implementation of stricter quarantine measures to address the threat from the Delta variant of the coronavirus disease 2019 (Covid-19) is another challenge to the financial stability of the country.

In a virtual briefing on Wednesday, BSP Assistant Governor Johnny Noe Ravalo said the threat from the Delta variant is “another turn in the road” and monetary authorities “try to expect the unexpected”.

“But in terms of financial stability, all of these, what could be, are part of our scenario analysis,” he said.

The threat of another lockdown looms after health authorities reported the local transmission of Covid-19 infections caused by the Delta variant.

Medical experts and a business group have backed the implementation of a lockdown in August to prevent further rise of infections since experts have said the Delta variant is more contagious than other Covid variants.

In his speech for the same event, BSP Governor Benjamin Diokno said while recovery is expected for the domestic economy this year, “recent estimates suggest that Covid-19 has taken away some of the opportunities that we expected prior to the pandemic”.

He said uncertainties for the future remain thus, risk aversion among investors is expected.

Diokno said international agencies have noted economic recovery but this varies among countries.

“This divergence is an essential element of what lies ahead. It creates spillovers that put the smaller economies at a disadvantage. This means that new risks may arise as we recover from older risks. We must address this before it becomes systemic,” he said.

Diokno said clear signs of stability remain “but market conditions remain very fluid.”

“Vigilance is required as we protect our gains while mindful of any further vulnerabilities. Systemic risk management has always been a whole-of-market agenda,” he added.

Source: Philippines News Agency

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