BSP admits challenges in PH banking system

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Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. in his speech during the 20th anniversary celebration of the BSP admitted the challenges that the Philippines is facing at present.

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“Among others, we are faced with the unwinding of easy monetary policy in advanced economies, which . . . if it becomes disorderly . . . could have serious spillover effects on our economy,” he said.

Tetangco added that the threat of unbridled market exuberance could also create imbalances in asset markets that could adversely impact the banking system’s ability to effectively intermediate funds.

“On the other hand, advances in information technology have encouraged the emergence of newer payment channels such as mobile banking . . . that . . . if not regulated properly . . . could undermine the credibility of our payments and settlements infrastructure,” he added.

The BSP governor further said that population growth continues to challenge the central bank’s programs on financial inclusion, education and consumer protection.

“The challenge before us is to translate our gains at the macro level down to the grassroots,” he said.

With these, Tetangco urged his colleagues at the BSP to find more efficient ways to use the central bank’s resources.

“Fellow BSPers, all these measures and courses of action are bound to weigh heavily on the resources of the Bangko Sentral. We need therefore to find more efficient ways to use our resources in the pursuit of our mandate,” he added.

On the other hand, Tetangco stated that despite challenges, the BSP managed to be closer into a truly world-class central bank.

He mentioned that in April, the BSP was hailed at the Asian Banker Leadership Achievement Awards as the Best Macroeconomic Regulator in the Asia Pacific Region.

“Fast forward to 2013 . . . and we see just how far the Bangko Sentral and our economy have come. The economy has more than doubled in size from 20 years ago,” he added.

The BSP governor also noted the 7.8-percent expansion of the economy in the first quarter this year, which is the fastest in the region. He said that inflation has fallen to historic lows and within-target levels for four consecutive years now, while gross international reserves at more than $82 billion can cover almost one year of imports of goods and services.

The banking system’s nonperforming loan ratio is less than 2 percent and capital at 17 percent is more than double the international standard of 8 percent, while the payment system is robust, processing an average of P1.5-trillion worth of transactions daily, 11 times more than the daily value just 10 years earlier, he added.

Mayvelin U. Caraballo

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