CEBU, Philippines - State-run financial institutions have created a Financial Stability Coordination Council (FSCC) to sustain the country’s good financial system despite external interventions.
The Bangko Sentral Ng Pilipinas (BSP), Department of Finance (DOF), Insurance Commission (IC), the Philippine Deposit Insurance Corporation (PDIC) and the Securities and Exchange Commission (SEC) recently formalized the creation of FSCC through a Memorandum of Agreement (MOA).
The FSCC is a voluntary interagency council whose key objective is to identify, manage and mitigate the buildup of systemic risk.
In a statement, the creation is said to follow a consistency with the overall prudential objective of financial stability of the country.
The FSCC, as a collaborative effort, expect to execute its agreements through its member agencies.
BSP governor Amando M. Tetangco Jr., DOF secretary Cesar V. Purisima, SEC chairperson Teresita J. Herboasa, and IC Commissioner Emmanuel F. Dooc and PDIC president Valentin A. Araneta signed the MOA recently in behalf of their institutions.
These five agencies reiterated their commitment towards achieving financial stability.
Organizationally, the FSCC structure has an Executive Committee, a Steering Committee and five Working groups. Sitting in the policy-making executive committee are the five principals and a designated senior official from each of the member agencies.
On the other hand, the steering committee, consisting of senior officers of the five agencies, is tasked to design the strategic direction of the council while the Working Groups, also composed of senior officials of the five agencies, look at critical issues that may be a factor in generating systemic risks.
Meanwhile, BSP reported that domestic liquidity growth eased to 32.7 percent year-on-year in December 2013 from 36.5 percent in the previous month.
Money supply growth was driven largely by the sustained expansion in domestic claims, or credits to the domestic economy.
Domestic claims rose by 11.6 percent in December 2013 from 12.3 percent due to the steady growth in bank lending.
BSP’s net foreign assets (NFA) position improved on the back of continued robust foreign exchange inflows coming mostly from overseas Filipinos’ remittances and BPO receipts.
Likewise, the NFA of banks increased as banks’ foreign assets expanded at a faster pace relative to the growth in their foreign liabilities.
Banks’ foreign assets expanded due mainly to the growth in foreign loans and receivables, while banks’ foreign liabilities rose on account of higher deposits and placements of foreign banks with local banks. (FREEMAN)