Banks backs economic recovery–BSP chief


THE Philippine banking sector remains sound, stable and supportive of the financing requirements of the recovering economy, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.

The capitalization of Philippine banks stand well above the 10 percent minimum requirement of the BSP and the 8 percent international standards, while system-wide non-performing loan ratio remain manageable, the BSP governor said in his keynote speech at a forum organized by Hong Kong-based multi-media firm Asset Publishing And Research Ltd. Lending has also improved expanding by 1.3 percent in August from a year ago. This marks the first expansion following the declines posted since December last year, according to a statement from the BSP.

In his speech, the Governor also expressed confidence in the Philippines’s economic recovery.

“A year-and-a-half since the pandemic, we are getting back on our feet. We have learned to live with the virus better with the government shifting to a risk-based approach to mobility restrictions,” Diokno said. “This strategic shift has resulted in better economic and health outcomes.” The Governor added that the 11.8-percent growth in gross domestic product in the second quarter of this year is more than just base effects but “reflects the impact of the fiscal and monetary policy support during the pandemic and the calibrated imposition of mobility restrictions which enabled many businesses, including public transportation, to continue operation.”

The BSP chief also cited data indicators that show that the economy is on the mend, such as improvements in manufacturing, employment, foreign direct investments and external trade. Thus, Diokno emphasized that the BSP is keeping its policy settings and regulatory relief measures supportive of the recovering economy and that withdrawal of relief measures will only be done once full recovery is underway.

“The monetary authorities will continue to provide an enabling environment for the attainment of the Philippines’s long-term economic goals, such as through price and financial stability and promotion of financial digitalization and sustainable finance,” the Governor added.

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