Manila: The country’s financial system remained resilient and stable despite global challenges driven by geopolitical tensions and policy shifts, as affirmed by the Financial Stability Coordination Council (FSCC).

According to Philippines News Agency, the FSCC, an inter-agency council including the Bangko Sentral ng Pilipinas (BSP), the Department of Finance (DOF), the Insurance Commission (IC), the Philippine Deposit Insurance Corporation (PDIC), and the Securities and Exchange Commission (SEC), released its 2024 Financial Stability Report (FSR) on Thursday. The report attributed the stability of the financial system to factors such as declining inflation, robust output growth, and ample international reserves.

The report highlighted that banks hold high capital buffers and ample liquidity, enabling the financial system to absorb potential losses and support economic activity. It also pointed out that financial markets showed no signs of asset price misalignments, benefiting from strong domestic investor participation.

“In a year full of change, the Philippine financial system demonstrated strength, backed by an improved understanding of market dynamics and lessons from the past,” said FSCC Chair and Bangko Sentral ng Pilipinas Governor Eli Remolona Jr.

However, the report warned of moderate risks that need close monitoring. It emphasized that global uncertainties, including geopolitical tensions, evolving monetary policies in major economies, and potential shifts in the United States following the presidential elections, could impact the Philippine economy.

To further reinforce financial stability, the FSR proposed strategic measures such as deepening the bond market, enhancing reporting frameworks, and developing macroprudential tools.