The Philippine government has put in place at least four lines of defense to ensure financial stability that includes an interagency council tasked to provide timely interventions to identify and manage the buildup of systemic risks in the domestic economy, said Finance Secretary Carlos Dominguez III.
Dominguez said at a regional business forum that the Financial Stability Coordination Council (FSCC), which was created in 2014, provides a venue for financial authorities and stakeholders to candidly discuss risk issues, including those that may not be immediately apparent to market participants, so that they can better calibrate responses to emerging risks.
He said this task of managing systemic risks to improve predictability and stability is made easier with the signing into law by President Duterte of the Personal Property Security Act, which aims to broaden access to financial services, especially for micro, small and medium enterprises (MSMEs); and the National ID System, which is designed to improve the delivery of services and widen financial inclusion.
A pending bill in the Congress seeking the approval of a Philippine Warehouse Act, which will enable the agricultural sector to convert their produce and goods into credit in a simpler and faster way, completes the set of defenses being put in place to achieve “the right balance between financial stability and financial deepening and development,” Dominguez said.
“By making new financial products available, we seek to empower our small and medium enterprises. Emerging financial technologies helped greatly in making our financial system to be more efficient in supporting economic activity. With these technologies, we are able to bring down the costs of financial intermediation and speed up payments,” said Dominguez in his remarks read for him by Finance Undersecretary Bayani Agabin during the 2019 Bangko Sentral ng Pilipinas-International Monetary Fund (BSP-IMF) Regional Dialogue on Financial Stability for ASEAN Central Banks held Monday in Manila.
Dominguez said the Philippines is also working closely with other member-states of the Association of Southeast Asian Nations (ASEAN) in a “comprehensive as well as continuing effort” to harmonize regulatory policies, facilitate payments across the region and share best practices among institutions.
“Ours is a region composed of some of the most dynamic economies in the world. Rapid growth and technological change create many challenges, especially for regulators tasked with managing risks and ensuring stability,” Dominguez said.
He said ASEAN`s ultimate goal is "not only to establish an effective common market but, virtually, an effective common financial system.”
Dominguez pointed out that “thought forums” such as the BSP-IMF Regional Dialogue form part of the larger process of sharing knowledge and adapting to best practices with the end in view of enhancing cooperation among financial institutions to improve the effective management of risks.
“I commend both the International Monetary Fund and our own Bangko Sentral ng Pilipinas for putting together this ‘thought forum,’ as the countries of the region aspire to achieve the right balance between financial stability and financial deepening and development,” Dominguez said.