has responded positively to these relief measures as we can see from banks ’ lending behavior and activities towards the sector. first, banks continued to extend loans to msmes even during the lockdown period. in fact, as of end - august 2020, credit allocated to msmes reached p527. 2 billion. second, banks granted new msme loans as well as re - financed existing loans. third, loans to msmes as compliance with the reserve requirements have likewise increased and banks ’ lending rates for msmes have generally declined. 1 / the pandemic has given us this opportunity to further accelerate the digital transformation of the financial services sector. the bsp encourages the use of electronic payments to enhance the speed, convenience and affordability of financial transactions. now, we have the pesonet and instapay, the current two automated clearing houses. the bsp is promoting the use of pesonet as a viable alternative to checks and recurring bulk payments while the instapay as a substitute for coins and cash. 2 / 4 bis central bankers'speeches the existence of the pesonet and instapay was crucial in facilitating two key milestone initiatives of the national retail payment system : the government e - payments ( “ egov pay ” ) facility via pesonet ; and the national quick response code standard ( “ qr ph ” ) via instapay. the pandemic has shown the critical role of digital platforms in financial transactions and in the economy in general. as a result of the pandemic and the consequent lockdowns, more consumers shifted from cash payments to digital payments. the evidence is crystal clear : the use of pesonet and instapay zoom exponentially. for the first eight months of 2020, the value of instapay rose by 388. 7 percent, while that of pesonet jumped 100. 7 percent. year - on - year. by volume of transactons, instapay and pesonet soared by 623. 8 percent and 129. 6 percent, respectively. personally this is music to my ears. one of my personal goals as governor of bsp is to have not less than 50 percent of transactions, by volume and value, should be done digitally rather than by cash payments by 2023. with the pandemic, i ’ m optimistic that this goal will be met sooner. of course, this is consistent to my other vision of having a cash

benjamin e diokno : supporting msmes and the economy in the new economy arrangement speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the u. p. alpha phi beta fraternity alphan thought leaders webinar series, 9 october 2020. * * * to all participants of this alphan thought leaders webinar series, good morning. i thank my fellow brothers of the u. p. alpha phi beta fraternity for organizing this webinar series in order to raise public awareness of the current challenges, opportunities, and innovations that we are facing as the result of the covid - 19 pandemic. let me start by providing a macroeconomic perspective on the estimated impact of the coronavirus pandemic. the covid - 19 pandemic raised uncertainty and affected economic activity of all nations though the its impact is uneven. based on the june 2020 imf world economic outlook, the global economy is projected to contract by 4. 9 percent in 2020 to be followed by a mild recovery of 5. 4 percent in 2021. in the philippines, economic output contracted by 16. 5 percent in the second quarter of 2020, after exhibiting 84 consecutive quarters of growth. this is the lowest recorded quarterly contraction since the 1981 series. the decline was primarily attributed to our lockdown measures to slow down the spread of the virus and help prepare our public health sector and local communities respond to the health crisis. by sector, only agriculture was able to post growth of 1. 6 percent. industry plunged by 22. 9 percent while services contracted by 15. 8 percent. in the industry sector, two major subsectors were worst hit : construction and manufacturing, which contracted by 33. 5 percent and 21. 3 percent, respectively. in the services sector, the top three sub - sectors that suffered the most were the following : 1 / 1. accommodation and food service activities 2. other services, that is, arts, entertainment and recreation ; and 3. transportation and storage. fortunately, we were prepared when the pandemic hit us. this slide shows the strength of our macroeconomic fundamentals in 2019. two decades of sustained economic and structural reforms served as well and enabled us to build buffers and widen policy space. our gdp growth averaged 6. 4 percent in the last 10 years. the robust growth of the domestic economy was achieved in an environment of generally stable inflation and was anchored