Phl banking sector braces to sustain healthy system

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By Ehda M. Dagooc (The Freeman) Updated May 22, 2012 12:00 AM 

CEBU, Philippines - While the Philippine banking and financial system is regarded as one of the strongest in the world, players are up to protect its strength in order not to fall in the pit of “complacency”.Bankers Association of the Philippines (BAP) announced its three-point agenda to cushion the country’s healthy financial system, from outside poison and other factors that may contaminate its strength and vigor.
BAP president Alberto S. Villarosa said the players in the Philippine banking system is addressing the capital and liquidity issues, specifically in hitting a “basel 3” level, saying one of the ingredients in achieving economic success is to develop a good and strong capital market.
Second, he said BAP members are also committed to improve banking governance, including transparency, among others. At present, Villarosa said, despite its strength the industry still has to improve its governance.
Thirdly, the banking players in the Philippines are also strengthening its “risk management” program.
“Although, we are already regarded as very strong, But we can’t say that we are already there. When everything seems going right and we let our guards down—it is when we have to start being alert,” said Villarosa in his recent visit to Cebu, as the BAP president.
He said the players in the banking sector in the Philippines led by the BAP is not “resting” and still on its toes despite its strength, reiterating that “black swans” happen usually during good times.
“Everybody is talking about bullishness, that’s when complacency comes in,” he said assuring that the banking sector players are “guarding their back” all the time.
Aside from good economic standing of the Philippines, Villarosa attributed the strong financial health on the country’s experiences having been able to come up successfully in several crises that slapped the banking industry hardly in the past.


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While other countries like the United States, Europe are now struggling in their financial stability, Villarosa takes pride that the Philippines on the other hand is now running on the “solid ground”, although he reiterated the players’ commitment to be always on their guard.
Unlike in 2003 and 2004, when the Philippines had “credibility problems,” now he said the country is moving forward and banks are also moving forward together with the economy.
He said the banking sector is also strengthening its partnership with the government, as part of the PPP (Public-Private-Partnership) thrust of the Aquino administration.
The banks he said is now looking at releasing the excess liquidity within the system which is calculated to reach in an average amount of P1.7 trillion. This will be made available through loans and capitalization requirement across industry segment from big to micro entrepreneurs.
In fact, he said with the friendly interest rate, the banking system in the Philippines had been able to open up its arm to the market widely, having been able to post healthy growth in terms of loan portfolio.
He said the pricing of the loans right now, is at top end (in terms of corporate rate), which means that banks are extending their arms so widely, while competition to offer credit packages is too fierce.
Meanwhile, Villarosa added that along with the strong implementation of protecting the health of the strong financial system in the country, BAP is also intensifying its financial literacy education program, in order to push savings rate among Filipinos. (FREEMAN)