DOF: ‘US banks’ failure won’t hurt local economy


FINANCE Secretary Benjamin E. Diokno assured the public on Wednesday that the concerns and challenges faced by the US banking system following the collapse of the Silicon Valley Bank (SVB) would not harm the Philippine economy.

In a message to reporters, Diokno said the Philippine banking system remains “sound” and “well capitalized.”

“There is no reported exposure of Philippine banks to Silicon Valley Bank,” he said.

“Think the Fed and US finance authorities have successfully ring fenced the banking turmoil,” he added.

Earlier this week, the Bankers Association of the Philippines (BAP) assured the public that the fallout from failed US banks will not have a “substantial” or “material” impact on the country’s banking system.

“The Bankers Association of

the Philippines assures the Filipino public that recent developments in the US financial system have no substantial or material impact on Philippine banks,” the group said in a statement on Tuesday.

The BAP issued the statement after concerns were raised regarding the strength of the US banking system following the collapse of SVB and Signature Bank of New York.

International news outfits have reported that the closure of the two lenders have been attributed to ill-timed decisions of their bankers.

Reports have also indicated that the sudden demise of the two US banks exposed the weaknesses in the US banking system, particularly in terms of regulation. (Related story:

“The prudential measures implemented by the BSP [Bangko Sentral ng Pilipinas] provide the necessary support that allows the Philippine banking system to withstand economic shocks,” the BAP said.

The BAP explained that local banks have “diversified” deposit bases that include all sectors of the Philippine economy, allowing them “to continuously provide the liquidity needs of their clients.”

The group added that Philippine banks’ current capital and liquidity ratios continue to “exceed” the requirements set by the BSP.

“The BAP continues to work with BSP and other stakeholders to pursue reforms that will lead to an even stronger financial system that sufficiently provides the financial needs of the banking public,” it said.