Philippine banks have minimal exposure in Russia and Ukraine due mainly to the country’s geographic distance from the conflict area, according to Bangko Sentral ng Pilipinas Governor Benjamin Diokno.
Diokno said the impact of Russia’s invasion of Ukraine on the country’s banking system and economy is limited on the back of the country’s strong macroeconomic fundamentals as well as limited economic and business links.
Diokno reported that the total investments of two Philippine banks in the trust departments of VTB Bank Public Joint Stock Company and Russian Agricultural Bank amounted only to P254.12 million
This, according to him, is less than one percent of the total assets under management of the country’s banking sector.
Likewise, the cross border deposit liabilities of Philippine banks to Russia and Ukraine amounted only to $672,200 and $969,200 respectively, or less than one percent of the banking system’s total deposit liabilities as of end September last year.
“The cross-border financial exposure of Philippine banks to Russia and Ukraine is minimal. Philippine banks have no cross border financial assets both with Russia and Ukraine,” Diokno said.
Furthermore, exports to Russia only amounted to $120 million or 0.2 percent of the Philippines’ total exports in 2021, while shipments to Ukraine amounted to a measly $5 million.
“In brief, trade financing transactions of banks with Russian counterparts are inconsequential,” Diokno added.
In terms of remittances from overseas Filipino workers (OFWs), the BSP chief said money sent home to the Philippines Russia and Ukraine accounted for less than one percent of the total.
“Nevertheless, BSP is aware that the crisis could indirectly affect the flow of remittances of overseas Filipino from the two warring countries,” Diokno warned.