central bank of the Philippines BSP
The Central Bank of the Philippines (BSP) headquarters on Roxas Boulevard in Manila. Image Credit: File

MANILA, Philippines: A Php300-billion (about $6 billion, Dh21.4 billion) warchest against novel coronavirus pandemic will be released in the Philippines.

The Monetary Board of the Philippines' central bank on Monday (March 23, 2020) announced the amount will be made available to the national government through a repurchase agreement.

It involves Php300 billion worth of government securities (or Treasury bonds) issued by the Bureau of Treasury (BTr) and bought by the Bangko Sentral ng Pilipinas (BSP), the country's central monetary authority, packaged as "a repurchase agreement", local media reported.

In simple terms, it means the BSP will invest in government-issued Treasury bonds released by the BTr, to be repaid in six months.

Cash, food for the poor

The national government will then use the amount to fund initiatives and programs in fighting the pandemic — such as food-aid-for-the-poor and the proposed cash to urban poor during coronavirus lockdown.

The Philippines' House of Representatives held a special session — with many members attending using a virtual meeting app — earlier on Monday, March 23, to debate a bill giving President Rodrigo Duterte emergency powers to address the coronavirus outbreak in the country.

The measure would allow Duterte to "temporarily take over or direct the operation" of privately-owned utilities or businesses needed to address public needs during the coronavirus emergency, among others.

In the virtual House meeting, only 20 lawmakers were allowed to be physically at the session hall.

Also on Monday, a bill granting emergency powers to President Rodrigo Duterte due to the coronavirus and authorizing “exercise powers necessary and proper to carry out the declared national policy” has been filed in the Philippine the Senate.

The BSP cut policy rates by 75 basis points this year and lowered rates on its rediscounting window.

"This arrangement is the most cost-effective way for us to provide an extra lifeline to the national government to support the programs to fight this pandemic," said National Treasurer Rosalia de Leon, told Manila-based news site Rappler.

The amount will be paid in full by the government within six months.

"This additional amount is intended to provide support for those most affected by the ECQ (enhanced community quarantine), especially in Luzon, for the next 60 to 90 days," said BSP Governor Benjamin Diokno.