The Freeman

Phl financial system maintains solid footing in 2021

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The Bangko Sentral ng Pilipinas (BSP) released the Report on the Philippine Financial System for the Second Semester of 2021. The Report highlighte­d that the Philippine financial system, which is bank-centric, remained sound and stable.

The Philippine banking system sustained its solid footing as shown by continued growth in assets, loans, and deposits, coupled with adequate buffers on capital, liquidity, and loan loss reserves. The banking system also posted higher net profit during the review period.

BSP Governor Benjamin E. Diokno said, “The analysis of the financial soundness indicators suggested that the Philippine banking system remains stable and exhibited resiliency despite the uncertaint­ies from COVID-19 pandemic. Nonetheles­s, the BSP will continue to monitor risks from credit exposures, including emerging risks from demand- and supply-side factors, which may amplify the impact of the health crisis on the economy.”

In support, the BSP deployed targeted and time-bound regulatory relief packages that facilitate­d the uninterrup­ted flow of financial services in the country. “The BSP credit-related relief measures remain in place until the end of 2022 to reinforce economic activity,” the Governor said.

The Report also highlighte­d that the foreign currency deposit system, trust entities, foreign banks in the country, quasi-banks and other non-bank financial institutio­ns generally showed positive performanc­e during the period under review. Meanwhile, pawnshops and money service businesses continued to provide complement­ary access points for improved financial services delivery, particular­ly to those in the rural areas.

The BSP remains committed to fostering a policy environmen­t that supports innovation and digitaliza­tion, promotes sustainabi­lity agenda in the financial system, and enhances surveillan­ce tools in monitoring elevated risks and vulnerabil­ities arising from the pandemic and global headwinds.

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