The local banking system is strong enough to meet the funding requirements of the growing economy, the Bangko Sentral ng Pilipinas (BSP) said.
At the recent Philippine Economic Briefing held at the Clark Freeport Zone, BSP Governor Nestor A. Espenilla Jr. cited the banking system’s capability to provide for the funding needs of the country, particularly at this time of rapid growth due to strong consumer spending and broad infrastructure reform.
“The Philippine banking system is now on very sound footing. It has become a very stable and reliable anchor for the economy. This is a product of deep and meaningful financial sector reforms we have boldly implemented since the 1997 Asian financial crisis,” Espenilla said.
The BSP chief was one of the top economic managers in the country to speak at the briefing.
Espenilla, in his report, highlighted the key performance indicators as the double-digit growth in assets funded by sustained growth in deposits, the continued expansion in lending, improvements in the banks’ asset quality, sustained profitable operations and more than adequate bank capital in recent years.
“The Philippine banking system is in a position of strength that enables it to meet the funding requirements of the growing economy while maintaining strong, healthy buffers against risks,” the BSP chief assured.
At the same time, Espenilla said the BSP is keen on pursuing initiatives to deepen the local debt market.
“This will go a long way in funding infrastructure and other big-ticket investments,” he said.
Steps toward achieving President Duterte’s ambitious infrastructure reform is one of the overarching themes of the briefing that focused on building public structures outside Metro Manila and on to other areas of the country.
The governor also took the opportunity to assure markets of their readiness to respond swiftly should inflation expectations get out of hand this year and next.
“We see these inflation drivers as transitory.
However, we are closely monitoring the situation. Amid the pickup in inflation, we stand ready to act, if needed, to firmly anchor inflation expectations so that inflation targets will continue to be met in 2018 to 2019,” Espenilla said.