financial safety net arrangements in the philippines
TRANSCRIPT
Financial Safety Net Arrangements in the Philippines
ASIA-PACIFIC REGIONAL COMMITTEEREGIONAL WORKSHOP
17 July 2017Yogyakarta, Indonesia
Shirley G. FelixVice President
Examination Group IPHILIPPINE DEPOSIT INSURANCE CORPORATION
Outline
1. Overview of the Philippine Financial System
a. Safety Net Players: Banking Institutions
b. Safety Net Players: Non-Banking Institutions
2. Financial Sector Forum
3. Financial Stability Coordination Council
4. Challenges and Next Steps
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Philippine Financial System
Commercial
Banks - 42
Thrift Banks - 59
Rural Banks - 498
With Quasi-Banking
Functions - 9- Investment Houses - 3
- Financing Companies -5
- Others - 1
Without Quasi-Banking
Functions - 5,540- Investment Houses - 3
- Non-Stock Savings and
Loans Association - 67
- Pawnshops - 5,401
- Others - 69
Sources: Bangko Sentral ng Pilipinas (March 2017); Insurance Commission (May 2017);
Securities and Exchange Commission (Dec. 2016)
Insurance
Companies - 101
Capital Market
Institutions - 232
Investment
HousesFinancing
Companies
Insurance
CompaniesPawnshops
Savings and Loan
Associations
Capital Market
Institutions
Philippine Financial Safety Net PlayersBanking Institutions
Philippine Deposit Insurance Corporation• Settlement of Insurance Claims• Insurance Risk Mitigation
- Financial Supervision and Regulation - Resolution of Problem Banks
• Receivership and Liquidation of Closed Banks
Bangko Sentral ng Pilipinas• Currency issue and Liquidity Management • Management of foreign currency reserves• Determination of exchange rate policy• Financial Supervision and Regulation• Appointment of a Bank Conservator• Designation of PDIC as Receiver of Closed Banks
Memorandum of Agreements on:• Exchange of data and information on supervision
and/or regulation of banks (2002)
• Information and reports on bank examination findings (2005)
• Modification of the Evaluation Process for Merger and Consolidation (2009)
• Bank Examination and Information Exchange (2013)
Joint Bank Strengthening Programs• Strengthening Program for Rural Banks (2010)• Consolidation Program for Rural Banks (2015)
Joint Undertakings of BSP and PDIC
Philippine Financial Safety Net PlayersNon-Bank Financial Institutions
Investment
HousesFinancing
CompaniesInsurance
CompaniesPawnshops
Insurance Commission• Regulation and supervision of
insurance and pre-need industries in the Philippines
Securities and Exchange Commission• Supervision of all registered business entities in the country• Policymaking in capital and securities market• Control over and approval of security registration statements• Power to investigate violations of securities laws and impose
sanctions • Power to issue subpoenas, punish for contempt, and issue cease
and desist orders
Bangko Sentral ng Pilipinas• Regulation of non-bank
institutions performing quasi-banking functions
Savings and Loan
Associations
Capital Market
Institutions
• Established in 2004
• To harmonize supervisory standards and regulatory policies
• To ensure adoption of coordinated actions in addressing vulnerabilities and weaknesses in the supervised institutions
– Consumer protection and education
– Information exchange and dissemination
Financial Sector Forum
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Financial Sector Forum (Mother Committee)• Highest body of FSF composed of the four agency heads.• Central Bank Governor as Chairperson
FSF Multilateral Working Committees• Supervision and Regulatory Policy Coordination• Information Exchange • Consumer Protection and Education
Financial Sector ForumStructure
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• Multilateral Memorandum of Agreement on Information Exchange
• Setup of Electronic Information Sharing (EIS)
• Continuous conduct of financial education expos in various cities nationwide
• Continuous participation in the Financial Regulators Forum
Financial Sector ForumAccomplishments
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• Crisis simulation exercise (2011) held among members of FSF
• Results of exercise stressed the need for– more concrete coordination among the
authorities
– platform to coordinate issues of financial crisis management and financial stability
• Led to the creation of the Financial Stability Coordination Council
Financial Sector ForumAccomplishments
Financial Stability Coordination Council
• Established in 2014
• To identify, manage and better understand the interconnectedness of the agencies
• To mitigate buildup of systemic risks in the financial system through information sharing
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Financial Stability Coordination Council
Executive Committee• Highest body of the FSCC composed of Agency heads• Central Bank Governor as Chairperson
Steering Committee• Designs the strategic direction of the Council• Meets to discuss the outputs of Working Groups
before elevating to Executive Committee
Working Groups• Financial Crisis Management and Resolution• Corporate Leverage• Capital Market Reform• Communication Group• Shadow Banking: Real Estate
Structure
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• Developed a Dashboard for risk surveillance
• Conducted debt profiling and debt analysis of non financial Corporations
• Conducted Corporate Financial Trend Survey (CFTS)
• Signed agreement with the Housing and Land Use Regulatory Board (HLURB) to gather data on real estate for risk monitoring
Financial Stability Coordination CouncilAccomplishments
Challenges and Next Steps
1. Work with new leadership of HLURB to roll out reporting template for real estate companies
2. Review of National Financial Crisis Management and Resolution Handbook
3. Secure corporate leverage data
4. Establish an effective system to communicate financial stability risks
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