BSP urged to boost buffers against natural hazards

The Bangko Sentral ng Pilipinas (BSP) is urged to boost buffers akin to emergency funds in case of natural hazards to ensure continuity of operations for a stable and secure financial system.

In a statement Thursday, April 18, the BSP said that this is part of the four recommendations that emerged after conducting a vulnerability review of its offices relative to natural hazards. The central bank was urged to implement the recommendations to remain in operation even in the midst of disruptions.

Based on the Assessment of the Vulnerability of BSP Offices to Natural Hazards report, the BSP is recommended to establish the so-called “additional controls and practices” to make sure that there will be an availability of “adequate buffers for financial losses.”

The report also recommended three other mustdo, including: improvement in the resiliency of BSP facilities; enhancement of the emergency response systems and business continuity strategies; and opportunities to improve further some aspects of the study for future vulnerability assessments.

The vulnerability review is intended to assess the “potential impact of climate and environmental hazards on BSP offices and branches.” “The assessment forms part of the BSP’S Sustainable Central Banking (SCB) Program to mainstream sustainability principles and green practices in the BSP operations and champion the sustainability agenda in the Philippine financial system,” said the BSP.

The BSP explained that the exercise involved two types of assessments.

The first one is a broad survey of the exposure of 24 BSP sites to natural hazards and extreme weather events using data generated from the Hazard-hunter. ph, University of the Philippines Nationwide Operational Assessment of Hazards (UP NOAH) and related historical information and reports.

Second, the BSP had an in-depth assessment of the potential impact of the most common hazards to the BSP in terms of potential financial losses due to damages to the bank premises and facilities as well as possible disruption in the delivery of business objectives, it said.

“The impacts on the delivery of BSP’S business objectives were qualitatively assessed using expert judgement of Regional Offices and Branches (ROBS) and Mission-critical Departments (MCDS), review of internal mitigating controls, business continuity plans, and previous experiences in dealing with natural hazards,” said the BSP.

It added that the exercise “benefited from the knowledge sharing with World Wide Fund (WWF) for Nature Philippines and expert review of the Department of Science and Technology Philippine Institute of Volcanology and Seismology (DOST-PHIVOLCS) on the methodologies adopted and areas covered in the assessment.”