Philippines: Financial Sector Assessment Program‑Technical Note on Risk Assessment of Banks, Non‑Financial Corporates, and Macro‑Financial Linkages
IMF Staff Country Reports, June 7, 2022
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- Philippines: Financial Sector Assessment Program‑Technical Note on Risk Assessment of Banks, Non‑Financial Corporates, and Macro‑Financial Linkages
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Bibliographic details
- Published: June 7, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400210181.002
Overview and system structure
- The financial system is dominated by banks.
- Total assets of the system amount to 126 percent of GDP.
- Bank credit is just over 50 percent of GDP and mostly goes to nonfinancial corporates (NFCs).
- Banks are tightly interlinked with NFCs through conglomerate ownerships.
- Non-bank financial institutions and capital markets—especially bond markets—are substantially less developed than banks.
- The Fintech ecosystem is nascent.
- Access to finance for individuals is significantly lower than comparator systems, with only a third of adults having formal accounts.
Key risks and linkages
- Bank–NFC linkages:
- Significant share of bank credit to NFCs.
- Ownership linkages via conglomerates increase contagion risk between banks and NFCs.
- Liquidity and solvency concerns:
- Subject tags include "A. liquidity risk profile", "bank solvency stress test Results", "UKB liquidity stress test Results".
- Credit and asset quality:
- Topics include "Credit", "Loans", and "Nonperforming loans".
- Macro‑financial and system vulnerabilities:
- Stress testing and macro‑financial linkages are central themes ("Stress testing", "Financial sector policy and analysis", "Monetary policy", "Money", "Liquidity").
- Market structure limitations:
- Underdeveloped bond markets and non‑bank financial institutions constrain market‑based risk sharing and financing alternatives.
Analytical scope and methods
- The note addresses risk assessment of banks, nonfinancial corporates, and macro‑financial linkages.
- Emphasis on stress testing and liquidity/solvency analysis, as indicated by keywords and subject classification.
Implications for policy and supervision (inferred focus areas from content)
- Strengthen monitoring of bank exposures to NFCs and conglomerate ownership structures to mitigate contagion risks.
- Enhance liquidity risk management frameworks and conduct regular solvency and liquidity stress tests.
- Promote financial inclusion to raise the share of adults with formal accounts above "only a third".
- Develop non‑bank financial institutions and capital markets, especially bond markets, to diversify funding sources and deepen risk sharing.
- Support Fintech ecosystem development while maintaining appropriate risk oversight given its nascent stage.
Publication metadata and scope
- Pages: 92
- Volume: 2022
- Issue: 155
- Series: Country Report No. 2022/155
- DOI: https://doi.org/10.5089/9798400210181.002
- Stock No: 1PHLEA2022002
- ISBN: 9798400210181
- ISSN: 1934-7685
- Subject keywords include: Asset and liability management, Credit, Financial institutions, Financial sector policy and analysis, International organization, Liquidity, Loans, Monetary policy, Money, Nonperforming loans, Stress testing; and keywords such as "A. liquidity risk profile", "bank‑NFC liquidity linkage", "IMF‑World Bank Financial Sector Assessment Program", "Southeast Asia".
International Monetary Fund. Monetary and Capital Markets Department "Philippines: Financial Sector Assessment Program‑Technical Note on Risk Assessment of Banks, Non‑Financial Corporates, and Macro‑Financial Linkages", IMF Staff Country Reports 2022, 155 (2022).
Content in this bundle
- 1phlea2022002 - Executive Summary