Despite external risks brought by the slow global economy, the Philippine banking system remains a particular strength of the country’s economy, a Bangko Sentral ng Pilipinas official (BSP) said during the Rural Bankers Association of the Philippines 60th National Convention on Monday.
“It can be said that a particular strength of our economy . . . is our banking system that remains sound, stable and liquid even in the midst global uncertainties,” BSP Governor Amando Tetangco Jr. said in his speech, which was delivered by BSP Deputy Governor Nestor Espenilla Jr.
Tetangco mentioned the recent development that the country achieved such as the robust 7.8-percent first-quarter gross domestic product growth, the credit upgrades from three rating agencies, low and stable inflation, a balance of payments surplus of $274 million in April and gross international reserves of over $83 billion also in April.
He added that consolidated assets and deposits of the banking system also continue to increase and become an indicator of the public’s trust and confidence in Philippine banks. Tetangco also cited the passage of Republic Act 10574, which allows the infusion of foreign equity in rural banks.
Other programs for rural banks, he said, were the P5-billion Strengthening Program for Rural Banks (now SPRB+)—jointly funded by the BSP and the Philippine Deposit Insurance Corp. (PDIC), and the central bank’s Prompt Corrective Action program, which helps banks identify areas for improvement. The BSP governor added that the Philippine rural banking sector is also the recipient of grants and technical support from national and multilateral institutions.
“In other words, the rural banking sector enjoys broad-based support—from President Benigno Aquino 3rd and the legislators who worked together on the ground-breaking law that allows foreign equity into rural banks; to local universal and commercial banks and other banks who work with rural banks; to international organizations and grant-giving agencies and national institutions including the PDIC and the Bangko Sentral ng Pilipinas,” he said.