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June 24, 2024

Medalla assures BBM of strong banking system amid global financial turmoil

Bangko Sentral ng Pilipinas Governor Felipe M. Medalla has provided assurances to Malacanang that the domestic banking system remains resilient against any potential shocks caused by the recent US bank failures.

Medalla said the Philippines’ well-capitalized banking system is unlikely to be affected by the troubles facing Credit Suisse of Switzerland, adding that the recent move by UBS to rescue Credit Suisse is a critical step in stabilizing banking sectors across the globe.

The BSP chief submitted notes to President Bongbong Marcos on Monday, outlining the differences between US and Philippine banks, and highlighting that the country’s diversified lending base and strong risk governance systems provide the local banking system with an additional buffer against external shocks.

Medalla also pointed out that Philippine banks have no material exposures to the collapsed US banks

He emphasized that the BSP has implemented several structural reforms that will ensure the safety and soundness of the local banking system amid external shocks.

As of end-September 2022, the country’s big banks’ capital adequacy ratio is well above international and regulatory standards, with a CAR of at least 10 percent required by the BSP.