The Philippines has a
lot to share in terms of best financial practices, with fellow member economies
of the Asia-Pacific Economic Cooperation (APEC) if they want to emulate those
initiatives, Bangko Sentral Ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo
said.
"I think we have distinguished ourselves in terms of undertaking initiatives in micro finance consumer protection and inclusive financial system," Guinigundo said.
The initiatives under this umbrella include the tweaking of regulations to allow financial institutions to open up windows for micro finance, he said.
He explained that micro finance allows micro enterprises to borrow funds without collateral and without credit history, although the amount of the loan may be limited.
Other countries could also examine the Philippines' credit surety fund, which the Bangko Sentral Ng Pilipinas has initiated. This is leveraging on the country's cooperatives that allows them to borrow 10 times of their minimum P100,000 contribution, he said.
Under this set up, there is an oversight committee composed of cooperatives themselves, the Land Bank of the Philippines, the Development Bank of the Philippines (DBP), the Industrial Guarantee Loan Fund, and the local government units, he said, adding that more than P1 billion has been granted under this framework.
The good combination of monetary policy and macro prudential policy is also something that the Philippines can share, he said.
Guinigundo said that in some jurisdictions, particularly in advanced economies, macro prudential measures are still in their early stages of being considered, much less implemented.
In the Philippines, these macro prudential measures serve as a means of ensuring financial stability in case of sector-specific shocks, particularly in asset markets, such as real estate properties, and at the same time on the conduct of monetary policy, he said.
The kind of financial reforms that the Philippines has undertaken would also be a good example, Guinigundo said, noting that the Philippines had implemented Basel III earlier than 2019 and it is moving quite prudently across the various components of Basel III, first with capitalization, and second with stable funding ratio, liquidity ratio, and others.
"I think we have distinguished ourselves in terms of undertaking initiatives in micro finance consumer protection and inclusive financial system," Guinigundo said.
The initiatives under this umbrella include the tweaking of regulations to allow financial institutions to open up windows for micro finance, he said.
He explained that micro finance allows micro enterprises to borrow funds without collateral and without credit history, although the amount of the loan may be limited.
Other countries could also examine the Philippines' credit surety fund, which the Bangko Sentral Ng Pilipinas has initiated. This is leveraging on the country's cooperatives that allows them to borrow 10 times of their minimum P100,000 contribution, he said.
Under this set up, there is an oversight committee composed of cooperatives themselves, the Land Bank of the Philippines, the Development Bank of the Philippines (DBP), the Industrial Guarantee Loan Fund, and the local government units, he said, adding that more than P1 billion has been granted under this framework.
The good combination of monetary policy and macro prudential policy is also something that the Philippines can share, he said.
Guinigundo said that in some jurisdictions, particularly in advanced economies, macro prudential measures are still in their early stages of being considered, much less implemented.
In the Philippines, these macro prudential measures serve as a means of ensuring financial stability in case of sector-specific shocks, particularly in asset markets, such as real estate properties, and at the same time on the conduct of monetary policy, he said.
The kind of financial reforms that the Philippines has undertaken would also be a good example, Guinigundo said, noting that the Philippines had implemented Basel III earlier than 2019 and it is moving quite prudently across the various components of Basel III, first with capitalization, and second with stable funding ratio, liquidity ratio, and others.
Basel III is a set of international banking regulations developed by the Bank for International Settlements to promote stability in the international financial system. The purpose of Basel III is to reduce the ability of banks to damage the economy by taking on excess risk.
"This is being done in a sequential, very prudent manner and this is also something that we like to share with them," he said.
Participants of the APEC Finance and Central Bank Deputies' Meeting wrapped up their two-day discussion held at the Taal Vista Hotel in Tagaytay City last Friday, with meeting results to be included in the Cebu Action Plan that will be launched in September. (PCOO News Release)
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