MANILA – The Philippines’ financial sector remains strong but Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said they remain steadfast in making sure that the economic impact of the pandemic will not affect the domestic financial system.
In a virtual briefing Tuesday, Diokno said the coronavirus disease 2019 (Covid-19) health crisis has a direct impact on the economy.
“What we want to ensure is that these difficulties do not spill over into our financial system, which by the way, remains strong,” he said.
Diokno said keeping the current strength of the domestic financial sector “leaves the economy anchored for the recovery efforts but making sure that the financial needs of the general public continue to be met.”
“It would be so much harder to move forward if we compound the difficulties with another layer of financial market disruptions,” he added.
Diokno further said the pandemic is affecting the macroeconomy and not just the health situation of countries around the world, thus the need to safeguard the financial system and prevent a negative impact on the real economy.
“Ensuring the continued health of the financial system requires a whole-of-market approach,” he said, citing measures such as assessing risk behaviors of those in the financial market, identifying the channels that players use to interact and evaluating these vis-à-vis the overall situation.
He said the “systemic-ness” of risks is not defined by the size of the initial shock but rather by the pervasiveness of its full effects.”
“We are as mindful of the big shocks as we are of small shocks than can morph into bigger and more extensive risks to the system,” he added.
Meanwhile, Diokno said cybersecurity is not just a task for the regulators but the financial sector players as well.
“So the thought process is an end-to-end chain and we must stay vigilant,” he said, adding the BSP has issued several regulations to identify, mitigate, measure and control risks. (PNA)