HBS-OPM’s “The New Normal”: Webinar with Sec. Carlos “Sonny” Dominguez and Mr. Cezar “Bong” Consing

By Lawrence L. Iliscupides, RPm

It’s terrific to end a day with learning and key takeaways in this time of uncertainty. Last April 29, 2020, Harvard Business School–Owner/President Management (HBS-OPM) Philippines hosted a webinar attended by hundreds of CEOs and senior executives from various organizations across industries.

Invited to share their insights about “The New Normal” were prominent and influential personalities from the finance sector such as Sec. Carlos “Sonny” G. Dominguez of Department of Finance (DOF) and Mr. Cezar “Bong” Consing, president of Bank of the Philippine Islands (BPI) and Bankers Association of the Philippines (BAP). It was such a privilege for me to hear valuable information about this new normal were all experiencing.

At around four in the afternoon, Ms. Pinky Tobiano, chairman and founder of HBS-OPM Philippines, officially opened the event, followed by an opening prayer led by Ms. Jen Uy. Subsequently, Mr. William Tiu Lim, president of HBS-OPM, delivered his welcome address. Following this, Amb. Joey Antonio introduced the first keynote speaker, Sec. Sonny Dominguez.

Sec. Dominguez’s presentation was filled with important information that sparked our interest. We were lucky to have been given a chance to ask some questions during the discussion that followed. Sharing here some key points from his presentation.

First, we must know and value priorities for the welfare of the Filipino people, considering the COVID-19 crisis.

• We must first save lives and protect our communities.
• We must provide financial support to millions of the most vulnerable families, as well as employees of small businesses.
• We must keep mobilizing resources to support our frontline health workers and increase our testing capacity.
• We must provide liquidity and support to the economy.

According to the presentation, the macroeconomic fundamentals of the Philippines are strong.

• Our country had a GDP growth rate of 5.9% in 2019, with an average growth rate of 6.4% from 2016–2019.
• The revenue effort was at its highest rate in 22 years, with 16.9 percent.
• Debt-to-GDP ratio in 2019 was manageable.
• As of March 2020, inflation rate was at 2.5%, which was within the target of 2 to 4 percent.

Now, how would COVID-19 impact our economy? Here are the recent estimates:

• -0.8% to 0.0% of 2020 GDP Growth
• 1.2 million workers are temporarily unemployed
• 5.3% deficit in budget
• 46.7% Debt-to-GDP ratio

Furthermore, Sec. Dominguez discussed the “Four-Pillar Socioeconomic Strategy Against COVID-19”, which accounts for the course of action towards a recovery plan.

• Pillar 1 focuses on the emergency support for vulnerable groups and individuals.
• Pillar 2 focuses on marshaling resources to fight COVID-19 (expanded medical resources and ensuring the safety of the frontliners).
• Pillar 3 focuses on the fiscal and monetary actions to finance emergency initiatives and keeping the economy afloat.
• Pillar 4 focuses on the economic recovery plan to create jobs and sustain growth. This includes the commitment to continue investments in social and infrastructure programs and the maintenance of the Build, Build, Build program.

After Sec. Dominguez’s presentation, Mr. Danny Ibasco introduced the second keynote speaker, Mr. Bong Consing. His presentation was quite short and technical in nature, but it was rich in data. It focused on monetary policy and banking industry response. Here are some key points from his presentation.

• Loan growth tracks M3 growth and is a multiple of GDP growth — 1) Loan growth is much higher than the Philippines’ (PH) GDP growth, 2) PH GDP growth is more intensive than the rest of the region, 3) PH loan growth as relative as 1.8% to 3.5 times, and 4) Because we come from a low base, loans per capita in our country is quite small (20% of Malaysia’s, 2% of Singapore’s, 40% of Thailand’s, and twice of Indonesia’s).
• Despite the growth in credit, we have not seen asset bubbles. BSP has been very effective at managing inflation. This growth in credit has not produced inflationary pressures, even in the real estate sector.
• Bank loans are growing steadily. The banking industry has doubled in size within the last six to seven years.
• COVID-19 caused a spike in credit spreads of U.S. public bonds and emerging public bonds.
• Post-Taal eruption in January 2020, lending rates responded to decisive BSP moves.
• Bank credit spreads have also declined and are at levels of January 2018.

After the informative presentations from our esteemed speakers, Ms. Carol Dominguez, John Clements president & CEO, moderated the Q&A smoothly. Moving forward, the e-plaques of appreciation were presented and given to guest speakers by Mr. William Tiu Lim.

Ms. Pinky Tobiano formally closed the webinar by thanking the keynote speakers and those who devoted their time to attend this important and timely event with a powerful and impactful “WeHealAsOne” slogan.

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About the author:

Lawrence is jolly, bubbly, and easy-to-be-with kind of person. He loves spending time at coffee shops to read his favorite books and going to places where there is good food. Instead of taking selfies, he tends to take pictures of beautiful scenery, food, and other things he finds #instagrammable. When he has spare time, he watches suspense-action series, romantic-comedies, and horror films. He also loves seeing and making time to socialize with his friends. In addition, his favorite pastime is listening to music, especially pop, R&B, and OPM, and sings along with the songs he plays.