malaysiangMANILA: The Financial Stability Coordination Council (FSCC) has cited the need for continued vigilance as market developments abroad may have an impact on the Philippines.
In a statement on Thursday, the Bangko Sentral ng Pilipinas (BSP) said the FSCC, led by its Chairman and BSP Governor Eli Remolona Jr., held an executive committee meeting last March 8 at the BSP office in Manila to discuss market developments.
Remolona acknowledged that there have been fresh rounds of uncertainties in advanced economies since the end of last year.
He noted that developments in various countries are likely to affect the Philippines in different ways.
‘While global markets have been very fluid, the Philippines has shown its resilience by expanding at a pace that exceeds that of most other economies in the world. The FSCC recognizes that expectations at the end of 2023 of early rate cuts by the US Federal Reserve have been tempered by recent US data,” Remolona said.
“That said, the Council weighs the potential spillovers
coming from abroad versus the resilience that the local market continues to exhibit,’ he added.
The council assessed during the meeting the funding needs of the corporate sector.
Estimates showed that a sizable portion of corporate bonds and loans will mature this year.
Given the nature of these debts, the FSCC said it expects a significant amount to be refinanced.
The council said it recognizes that the banking sector has been able to provide much of the corporate funding through the years.
However, the FSCC said it also expects a stronger capital market to complement the banking sector and to better manage various risks.
Over the medium term, the FSCC said it also looks forward to seeing concrete developments in the fixed-income market leading to more access by Philippine corporations to the bond market.
‘Enhancing the capital market is an issue that is shared by all members of the FSCC. We recognize that regulators must take a more proactive role in market development and encourage deliberate collab
oration among stakeholders,’ said Remolona.
He said the FSCC vowed that it will continue to assess the funding requirements of corporations.
This is a core function in its continuing objective to further economic growth while avoiding possible surprises that can have adverse consequences on the economy, he added.
The FSCC was first convened in October 2011 as a voluntary initiative of the BSP, in partnership with the Department of Finance, Insurance Commission, Philippine Deposit Insurance Corporation, and Securities and Exchange Commission.
In July 2021, Executive Order 144 was signed and has since institutionalized the role of the council in managing systemic risks in the Philippines.
Source: Philippines News Agency
