Banking
From The Report: Philippines 2018
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The banking sector in the Philippines is expanding rapidly, hitting double-digit credit growth in four of the five years in the 2013-17 period. In addition, the sector simultaneously recorded notable improve-ments across major stability indicators. The country’s banking sector is highly liquid and well provisioned, and it benefits from robust macroeconomic growth, even as excess liquidity and credit concentration in certain sectors have become a concern. All signs point to continued expansion in 2018, with non-performing loans declining in recent times as credit growth has gained momentum. Furthermore, global rating agencies have projected stable, sustainable expansion, although the sector’s outsized corporate loan portfolio leaves commercial banks – particularly creditors of large conglomerates – exposed to concentration risks. This chapter contains an interview with Nestor A Espenilla Jr, Governor, Bangko Sentral ng Pilipinas; and a roundtable with Aftab Ahmed, Country Officer, Citibank Philippines; Cecilia C Borromeo, CEO, Development Bank of the Philippines; Simoun Ung, President and CEO, OmniPay; and Edwin Bautista, President and CEO, UnionBank of the Philippines.

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Overview

Stable expansion: Robust credit growth and ongoing reforms contribute to a positive sector outlook
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The banking sector in the Philippines is expanding rapidly, hitting double-digit credit growth in four of the five years from 2013 to 2017. The sector has simultaneously recorded notable improvements across major stability indicators. The country’s banking sector is highly liquid and well provisioned, and it benefits from robust macroeconomic growth, even as excess liquidity and credit concentration in certain sectors have become a concern. All signs point to continued expansion in 2018,…

Interview

Market-based policy: Nestor A Espenilla Jr, Governor, Bangko Sentral ng Pilipinas (BSP), on financial technology (fintech) and regulatory change
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Interview:Nestor A Espenilla Jr. How can fintech support financial inclusion? NESTOR ESPENILLA: Fintech allows people in areas with limited bank presence to easily access financial services through mobile devices. Our long-term goal is to bring all Filipinos into the formal financial system. As such, we are developing a digital finance ecosystem. We are implementing the National Retail Payment Systems policy framework, which will enable electronic fund transfers (EFTs) across accounts with…

Analysis

Solid Backing: Development Banks Are Set To Play a Key Role in Financing Upcoming Infrastructure Projects
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Government financial institutions are set to play an increasingly important role in infrastructure financing in the coming years, as President Rodrigo Duterte’s administration rolls out the Build, Build, Build (BBB) agenda, a multibillion-dollar infrastructure development programme focusing on the construction of new railways, urban mass transport systems, seaports, bridges, roads, highways and cities. The government plans to boost infrastructure spending to as much as 7.3% of GDP by 2022, with…

Analysis

At the forefront: The government is supporting financial technology innovation to promote inclusion and operational efficiency
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With innovations such as digital and mobile banking, e-payment systems, blockchain ledgers and cryptocurrency, financial technology (fintech) is set to expand rapidly in the coming years, bolstered by a supportive regulatory environment, low levels of financial inclusion and rapid adoption of digital technology. Regulation In 2017 the country’s central bank, Bangko Sentral ng Pilipinas (BSP), stated it supports responsible fintech innovation, as it holds the potential to promote financial inclusion…

Overview

Access all areas: Aftab Ahmed, Country Officer, Citibank Philippines; Cecilia C Borromeo, CEO, Development Bank of the Philippines;
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Interview:Aftab Ahmed; Cecilia C Borromeo What are the next steps to accelerate the transition into a digital financial system? AFTAB AHMED: Digitisation is transforming the way individuals and businesses access financial products and services. The transition to digital is enhancing efficiency and security while also contributing to greater financial inclusion. This is particularly relevant in the Philippines as a sizeable percentage of the population remains unbanked and does not have direct…