## 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_

## Source details

**Canonical URL:** [Philippines: Financial Sector Assessment Program‑Technical Note on Risk Assessment of Banks, Non‑Financial Corporates, and Macro‑Financial Linkages](https://www.imf.org/en/publications/cr/issues/2022/06/02/philippines-financial-sector-assessment-program-technical-note-on-risk-assessment-of-banks-518569)

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## Bibliographic details
- Published: June 7, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400210181.002

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### 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).*

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## Content in this bundle

- **1phlea2022002 - Executive Summary**
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_Source: https://www.imf.org/en/publications/cr/issues/2022/06/02/philippines-financial-sector-assessment-program-technical-note-on-risk-assessment-of-banks-518569_