BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno expressed confidence that the economic disruptions caused by the pandemic did not overshadow growth in the country’s capital markets and that the country’s monetary authority will continue to play an ‘active role’ in deepening the sector.
In a briefing last Thursday, Diokno said the BSP is currently working with the Securities and Exchange Commission, the Department of Finance and the Bureau of the Treasury in performing this role.
“The capital market roadmap is a calibrated, deliberate, and sequenced program consisting of immediate to medium-term action plans. This approach ensures synergy in policy direction at the national level as well as the smooth execution of the necessary reforms by concerned regulatory authorities,” the governor said.
Diokno said the development of the country’s capital markets supports the BSP’s mandate of promoting the stability of the domestic financial system.
“Deep capital markets facilitate the efficient allocation of funds in the economy. By diversifying funding sources, they also support financial system resilience as stresses on a single creditor will not be propagated in the system,” Diokno said.
The BSP governor said developments in the Philippines capital sector will benefit the economy as it facilitates the efficient allocation of funds in the economy and promotes sustainable growth by addressing funding gaps.
Diokno also said the existence of alternative sources of funds, like capital markets, would drive banks to enhance their own efficiency in providing funding and can improve overall financial inclusion in the country.
“The BSP will continue to strengthen its efforts towards capital market development as this is in line with its mandate of ensuring financial stability,” the governor said.
Image credits: Nonie Reyes