THE BANGKO SENTRAL ng Pilipinas (BSP) joined monetary policy makers in Asia-Pacific to discuss the challenges posed by the coronavirus pandemic and the policies needed against financial stability risks.
The conference was hosted by the International Monetary Fund’s Asia-Pacific Department on March 25 and included senior policy makers all over the region.
“We know that we have to manage the servicing of existing debts and we know that some firms may no longer be as viable in the New Economy,” BSP Assistant Governor Johnny Noe E. Ravalo said in his remarks at the conference.
The central bank official noted how the pandemic-induced recession made private corporations vulnerable.
“This problem, its surprise occurrence, and its sheer magnitude are uniquely different and require creative interventions from the authorities,” Mr. Ravalo said.
BSP Governor Benjamin E. Diokno has said they remain vigilant of emerging risks that could threaten financial stability. He said they will intensify their surveillance on financial institutions to ensure continued soundness, stability, resilience, and inclusivity in the banking system.
Financial regulatory officials have been on guard for potential systemic risks — where an event at the company level could trigger severe instability or the collapse of an entire industry or economy — due to the global recession.
Meanwhile, Mr. Ravalo said vulnerable households should also be kept in mind in terms of policy making for a holistic whole-of-market approach.
“We need to actively communicate so that people can make informed choices. And we should be concerned with welfare changes within society because this is what financial stability is all about after all,” he said. — L.W.T. Noble