‘PH banks remain resilient despite global jitters’
MANILA, Philippines – Banks in the Asia-Pacific region, including ones in the Philippines, are resilient to risks that characterized the failure of two large financial institutions in the United States, mainly as authorities are expected to support Asian banks if needed, according to Fitch Ratings.
At the same time, the Bangko Sentral ng Pilipinas (BSP) reiterated that Philippine banks are “safe and sound,” and are seen to be insulated from any ripple effect.
Still, BSP Governor Felipe Medalla said in a statement that the regulator was ready to act in case the situation turns for the worse.
“We have shown our resilience through the pandemic and we continue to be strong in the face of the ongoing turbulence in the global markets,” he said.
Medalla said the BSP recognizes the actions taken by banking supervisory authorities to address the potential contagion risk from the closure of banks.
“Nonetheless, we will respond accordingly as market conditions evolve,” he added. “We reiterate our earlier statement that our banks do not have any material exposure to the failed institutions.”
The BSP chief said the central bank’s longstanding efforts, in consultation with the industry, in setting prudent standards and executing risk practices “remain the key pillar in safeguarding the interests of the Filipino people.”
A statement from Fitch Ratings bolsters the BSP’s assurance as the credit watchdog said that among Asia-Pacific banks that it is rating, direct exposures to Silicon Valley Bank (SVB) and Signature Bank appear limited.
Fitch says Asia-Pacific banks resilient to risks highlighted by U.S. bank failures
For banks that do have direct exposures to SVB and Signature, Fitch Ratings said these were not material to credit profiles.
“Weaknesses that contributed to the failure of the two banks are among the factors already considered in our rating assessments for [Asia-Pacific] banks, but these are often offset by structural factors, such as regulation and our expectations that authorities would provide liquidity support if needed,” the group said.
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