Philippines: Financial Sector Assessment Program-Detailed Assessment of Observance—Basel Core Principles for Effective Banking Supervision

IMF Staff Country Reports, November 10, 2020

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Philippines: Financial Sector Assessment Program-Detailed Assessment of Observance—Basel Core Principles for Effective Banking Supervision

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Bibliographic details

• Published: November 10, 2020
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781513560786.002

Summary

• The BSP’s regulatory framework is broadly effective for the size and complexity of the Philippine banking system.
• Legislative gaps continue to hinder effective supervision of banks.
• The BSP has a well-resourced, experienced and highly committed staffing complement.
• There is an ongoing need to develop and maintain adequate expertise in certain complex areas (e.g., risk modelling).
• Since the FSAP in 2002, and the assessment update in 2010, the BSP has made significant progress in enhancing the regulatory framework in a number of areas.
• Significant weaknesses in the legislative framework, arising notably from the bank secrecy laws and the lack of power for the BSP to supervise the parent companies and their affiliates of banking groups, present a material hindrance to effective supervision.

Major findings on supervisory effectiveness

• Regulatory framework: Broadly effective relative to the size and complexity of the banking system.
• Legislative constraints:
  • Bank secrecy laws limit supervisory effectiveness.
  • Lack of power for the BSP to supervise parent companies and affiliates of banking groups is a material hindrance.
• Human resources and expertise:
  • Well-resourced and experienced staffing complement.
  • Continued need to develop and maintain expertise in complex areas, specifically risk modelling.

Progress and historical context

• Noted progress since:
  • FSAP in 2002.
  • Assessment update in 2010.
• Areas of enhancement: Multiple aspects of the regulatory framework have been significantly strengthened since those assessments.

Subjects and keywords

• Subjects: Basel Core Principles, Commercial banks, Credit, Credit risk, Financial institutions, Financial regulation and supervision, Market risk, Money, Operational risk
• Keywords: banking group, Basel Core Principles, central bank, Commercial banks, CR, Credit, credit risk, Credit risk, Global, ISCR, Market risk, risk management, risk profile, senior management

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