The Bangko Sentral ng Pilipinas (BSP) estimated on Wednesday that the liquidity it infused into the financial system to support the country’s economic recovery from the coronavirus disease 2019 (Covid-19) pandemic has reached about P1.3 trillion.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno speaks during the Pre-State of the Nation Address forum on Wednesday. SCREENGRAB FROM THE PTV FACEBOOK PAGE

At the Pre-State of the Nation Address (SONA) forum, BSP Governor Benjamin Diokno said the amount was equivalent to 6.4 percent of the country’s gross domestic product.

It is also greater than the P1.2 trillion in money-supply support he announced earlier.

Diokno also said the Bangko Sentral had implemented “liquidity-enhancing” measures to complement the government’s broader health and fiscal programs in mitigating the pandemic’s impact.

These, he added, “are intended to reassure markets, restore business confidence and ensure quick recovery once the community quarantines are lifted.”

Diokno did not provide a breakdown of these measures, but said the central bank already implemented a cumulative 175-basis point (bp) reduction in its key policy rates.

It also released about P200 billion in liquidity into the system with its 200-bps cut in the reserve requirement of banks.

Other measures are its P300-billion repurchase agreement with the government, purchase of state securities in the secondary market and the remittance of advance dividends worth P20 billion to the government.

“The implementation of these measures has helped ensure ample liquidity, as well as the proper functioning of the financial system during the lockdown,” he said.

Besides these measures, Diokno also highlighted a package of measures by the Bangko Sentral to further reduce the financial burden on loans to micro, small and medium enterprises (MSMEs).

“In particular, loans granted to MSMEs and large enterprises that are not part of [a] conglomerate structure shall be counted as part of banks’ compliance with reserve requirements,” he said.

This refers to a policy adopted by the BSP’s policymaking Monetary Board in April that recognized new loans granted to MSMEs as a form of alternative compliance with reserve requirements effective April 24, 2020 until Dec. 30, 2021.

This policy was amended the following month to allow lenders to count their loans to large enterprises as part of their reserve requirements.