DoF sees better trade with China
This crisis is very unique in the sense that interest rates are low
While the country’s trade experienced setbacks both in imports and exports, Finance secretary Carlos Dominguez III said it will soon get better following a more positive prospect from the country’s biggest trading partner, which is China.
“Our biggest trading partner is in good shape and that’s China. Our trade with China is around $50 billion a year and that is double of what it is of the US and Japan separately,” Dominguez said.
“So, demand in China is going to pick up, it’s going to buy our products and that is good news for us. We are not so happy that Europe is really having a difficult time and that the US is experiencing serious economic problems. it’s not rainbows outside there but at least within our neighborhood, we are okay,” he added.
Still, the Finance chief said the more than ample liquidity in the financial system along with low interest rates will help stimulate economic activities, supporting majority of businesses in the Philippines.
“This crisis is very unique in the sense that interest rates are low. Remember the prices you put in 1997 when the interest rates are almost 30 percent. Now interest rates are low,” he explained.
“I think we’ve done together with the central bank a really good job and then on the micro level, we have infused capital into our micro lending operations of the Land Bank (of the Philippines) and the DBP (Development Bank of the Philippines),” he added.
According to Dominguez, such infusion will generate about P300 million or P400 million in credit availability in addition to the P5 billion placed in their guarantee program, which was eyed to generate close to P100 billion in potential guarantees for small and medium enterprises.
The Cabinet official likewise stressed that the drop in consumer demand cannot be solved by anything other than regaining the public’s confidence, thus, their push for the gradual reopening of the economy.
“The real problem is the drop in demand and that drop in demand has come about because of the restriction in mobility,” he explained.