The Philippines needs to prepare for the transition to a “new economy” to mitigate the systemic risks posed by the novel coronavirus disease pandemic, according to the Financial Stability Coordination Council.
In its second semester 2020 Financial Stability Report, the council has identified the various systemic risks faced by the country due to the economic and health crisis created by the virus outbreak.
For one, Bangko Sentral ng Pilipinas Assistant Governor Johnny Noe Ravalo said incomes of both households and the business sector have been impaired.
Ravalo added, “The second point is that financial risk aversion remains elevated. This is a natural response in the financial markets in the face of uncertainty.”
The BSP official also said COVID-19 gives rise to welfare and inequality issues.
Since incomes are affected and preferences changed, Ravalo said there was also a shift in how consumers behave and how investors manage their risks.