• By The Financial District

BSP: Financial System Strong

The country’s financial system remains strong in the first half of 2021 amid the pandemic and the Bangko Sentral ng Pilipinas (BSP) has lined up several reforms to ensure the sector’s continued resilience.

Photo Insert: Makati City is known as the main financial district of the Philippines.

In a report released yesterday, the central bank identified these reforms as the transfer of significant ownership in banks and non-bank financial institutions with a quasi-banking license (QBs); climate change, environmental and social risks; digital banking operations; open finance framework; fraud management; and customer due diligence.

“Moving forward, the BSP remains committed to building its existing regulatory and supervisory frameworks to ensure that the banking system, as the core of the financial system, continues to operate in a safe and sound manner while at the same time responsive to the demands of the new economy,” it said.

Regarding the transfer of significant ownership, the report said the central bank will issue prudential requirements on the transfer in line with the regulations under Section 25-A of the amended New Central Bank Act.

“The underlying principle of the policy reform is to ensure that persons capable of exerting significant influence or control over the bank’s/QB’s affairs shall possess integrity, financial capacity, and sufficient knowledge of the business environment, operating model, and attendant risks that may affect the entity,” it said.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

On the policy related to climate change, the BSP is set to finalize Phase 2 of its regulations on sustainable finance framework.

“This will provide detailed guidance with respect to the integration of climate change and other environmental and social risks in the enterprise-wide risk management of banks/NBQBs (non-bank financial institutions with quasi-banking functions), particularly in the areas of credit and operational risk,” the report said.

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