The Philippine financial system remains resilient and stable despite global economic challenges stemming from geopolitical tensions and policy shifts, according to the Financial Stability Coordination Council (FSCC).
In its 2024 Financial Stability Report (FSR) released Thursday, the inter-agency council, composed of the Bangko Sentral ng Pilipinas (BSP), Department of Finance (DOF), Insurance Commission (IC), Philippine Deposit Insurance Corporation (PDIC), and Securities and Exchange Commission (SEC), cited declining inflation, strong economic growth, and sufficient international reserves as key factors underpinning this stability.
The report highlighted that Philippine banks possess strong capital buffers and ample liquidity, enabling the financial system to withstand potential losses and support economic activity. Furthermore, financial markets showed no indications of asset price misalignments and benefited from strong domestic investor participation.
“In a year full of change, the Philippine financial system demonstrated strength, backed by an improved understanding of market dynamics and lessons from the past,” stated FSCC Chair and BSP Governor Eli Remolona Jr.
However, the FSR cautioned that while the financial system is robust, it faces moderate risks that require close monitoring. These risks include the potential impact of global uncertainties such as heightened geopolitical tensions, evolving monetary policies in major economies, and potential shifts in the United States following the presidential elections.
To further strengthen financial stability, the FSR outlined strategic measures including deepening the bond market, enhancing reporting frameworks, and developing macroprudential tools.
