MANILA, Philippines — Philippine banks continue to gear up for the interest rate increase by the US Federal Reserve, the ongoing Ukraine-Russia war, rising global inflation and the impact of the May 9 elections.
Antonio Moncupa Jr., newly elected president of the Bankers Association of the Philippines (BAP), said member banks are working closely with the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), other regulatory agencies, and Congress to achieve an efficient, strong and well functioning banking sector.
“With the pandemic, geopolitical tensions, US rate hikes and tapering, global inflation, and a new Philippine president, we have some very interesting days ahead.” Moncupa said.
Last week, the US central bank raised interest rates by 25 basis points to 0.5 percent, the first time since December 2018, to tame inflation. The US Fed is now expecting a more aggressive path ahead as it pared expectations of economic growth and sharply raised the outlook for inflation this year.
Moncupa said the BAP continues to seek better banking efficiency through modernization and digitalization, better fixed income, foreign exchange and derivatives markets, as well as safe and trustworthy banking.
“These are necessary preconditions that improve commerce, create jobs, and increase economic output,” Moncupa said.
Moncupa , who is also president and CEO of East West Banking Corp., replaced Philippine National Bank president and CEO Jose Arnulfo Veloso as president of the BAP.
In his speech, Veloso highlighted the banking industry’s resilience in light of the ongoing economic situation, armed with P224 billion in profits and P20.8 trillion in total resources.
“The banking industry performed even better than expected coming out from the pandemic. There is more than enough liquidity to support the borrowing needs of the country and its people as we gear up toward a full economic recovery,” Veloso said.
The BSP’s COVID response measures unleashed P2.3 trillion into the financial system to help boost economic activity.
“These demonstrate the banking sector’s resiliency and preparedness built through the years and having survived a number of economic, financial and even geopolitical crises,” Veloso said.
Veloso said the road ahead may be uncertain and filled with obstacles.
“But let us embrace these with hope and gratitude for the opportunity to innovate and further strengthen the banking industry. With great confidence, the BAP will continue to be a strong force in the Philippine banking industry for our country and the Filipino people,” Veloso said.
BAP managing director Benjamin Castillo said member banks continued to be proactive in serving the interests of the banking stakeholders.
“We proactively worked closely with banking regulators and government agencies, media groups, and social media personalities to keep the public informed and educated on the latest trends and developments in cybersecurity,” Castillo said.
On promoting sustainable finance, Castillo reported that local banks have issued at least $1.15 billion in green, social, and sustainability bonds to encourage the financing of green projects.
“Incorporating sustainability shall promote long-term economic growth and development, which ultimately helps improve the quality of life of the Filipino people and ensure ecological integrity in the country,” Castillo added.
Aside from Moncupa, also elected as officers of BAP were Land Bank of the Philippines president Cecilia Borromeo as first vice president, ING Bank country manager Hans Sicat as second vice president, Security Bank president Sanjiv Vohra as secretary and Bank of the Philippine Islands president Jose Teodoro Limcaoco as treasurer.