Philippine financial system maintains solid footing in 2021
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 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. BSP
