The Philippine banking sector remains sound, stable, and supportive of the financing requirements of the recovering economy, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said during his keynote speech at The Asset Magazine’s 16th Philippine Summit: Reviving Paths to Recovery.
The capitalization of Philippine banks stand well above the 10% minimum requirement of the BSP and the 8% international standards, while system-wide non-performing loan ratio remain manageable.
Lending has also improved expanding by 1.3 percent in August from a year ago. This marks the first expansion following the declines posted since December last year.
In his speech, the Governor also expressed confidence in the Philippines’ economic recovery.
“A year-and-a-half since the pandemic, we are getting back on our feet. We have learned to live with the virus better with the government shifting to a risk-based approach to mobility restrictions. This strategic shift has resulted in better economic and health outcomes.”
The Governor added that the 11.8 percent GDP growth in the second quarter of this year is more than just base effects but “reflects the impact of the fiscal and monetary policy support during the pandemic and the calibrated imposition of mobility restrictions which enabled many businesses, including public transportation, to continue operation.”
The BSP chief also cited data indicators which show that the Philippine economy is on the mend, such as improvements in manufacturing, employment, foreign direct investments, and external trade. Thus, he stressed that the BSP is keeping its policy settings and regulatory relief measures supportive of the recovering economy and that withdrawal of relief measures will only be done once full recovery is underway.
“The monetary authorities will continue to provide an enabling environment for the attainment of the Philippines’ long-term economic goals, such as through price and financial stability, and promotion of financial digitalization and sustainable finance,” the Governor added.
The BSP chief also urged stakeholders to help speed up economic recovery by ensuring that “the benefits from digitalization and financial sustainability reverberate in the economy and our people’s lives sooner than later.”
The Governor’s keynote was part of a panel entitled “In transition to a new economy,” the first part of The Asset Magazine’s 16th Philippine Summit. The Governor’s speech was followed by a Q&A moderated by Mr. Daniel Yu, The Asset’s editor in chief.
Aside from the BSP Governor, Deputy Governor Chuchi Fonacier of the Financial Supervision Sector also participated in the exclusive discussion on digital transformation along with private sector experts on digital payments and channels. The Summit was attended by over 300 government and private sector experts, finance and trade regulators, and industry leaders in banking and digital finance.
Source: Ministry of Foreign Affairs, Government of Singapore