The Philippine financial system remains resilient, but regulators are monitoring risks tied to large corporate exposures and rising leverage, the Financial Stability Coordination Council (FSCC) said.
“The banking system’s resilience is underpinned by strong capital and liquidity,” Bangko Sentral ng Pilipinas Governor and FSCC chairman Eli M. Remolona, Jr. said.
The FSCC — composed of the BSP, Department of Finance, Securities and Exchange Commission, Insurance Commission and Philippine Deposit Insurance Corporation — warned that concentrated exposures to conglomerates could magnify shocks if conditions deteriorate.
While corporate balance sheets remain sound, the council said those concentrations could become systemic vulnerabilities.
The FSCC also flagged rising corporate leverage, consumer credit and housing loans. “Growth and risk often travel together,” the council noted.
Regulators said they are expanding surveillance, improving data quality and tightening oversight, particularly as non-bank financial institutions adopt new business models.
The FSCC also cited PDIC’s efforts to refine early intervention tools to address distressed banks more quickly and preserve confidence.
