The Philippine financial system remained resilient and weathered the devastating impact of the COVID-19 pandemic in 2020, according to a report released by the Bangko Sentral ng Pilipinas over the weekend.
The BSP's "Report on the Philippine Financial System for the Second Semester of 2020" highlighted the narrative of the domestic financial system as it entered the COVID-19 pandemic in a relatively strong position in 2020 and overcame its effects while ensuring relevant delivery of financial services upholding its critical role to the domestic economy.
It said the COVID-19 pandemic tested the resilience of the banking system and the robustness of the financial ecosystem as the country reacted to the global health crisis. “This novel crisis significantly affected the banking operations as the community quarantine and social distancing measures, prompted banks to adjust their daily banking services," the report said.
The BSP said it deployed targeted and time-bound regulatory relief packages that facilitated the uninterrupted flow of financial services.
BSP Governor Benjamin Diokno said the relief packages strived to address the critical requirements of the economy while ensuring that financial stability would not be compromised.
"The financial soundness indicators, which assessed the banking system’s strengths and weaknesses, affirmed that the banking system is resilient during the pandemic year 2020 but implied that consequent risks from lending should be monitored, including emerging risks from demand side and supply side factors, which may amplify impact on the economy," the report said.
It said foreign currency deposit system, trust entities, foreign banks in the country, quasi-banks and other non-bank financial institutions all showed positive performance during the period.
Meanwhile, the pawnshops and money service businesses proved their role as critical access points for the improved service delivery of the financial system in 2020.
The BSP said it was committed and ready with its enhanced onsite and off-site surveillance tools and prudential policy toolkit to promote the financial sector reform agenda for sustaining the sound and stable financial system conducive to a strong, dynamic and inclusive economic growth recovery for all Filipinos.
