The Financial Stability Coordination Council (FSCC) convened its 39th Executive Committee meeting to assess global market developments and their implications for the Philippine financial system.
The FSCC, an inter-agency body, includes the Bangko Sentral ng Pilipinas (BSP), the Department of Finance, the Insurance Commission (IC), the Philippine Deposit Insurance Corporation, and the Securities and Exchange Commission. Initially a voluntary group formed after the Global Financial Crisis, it was institutionalised under Executive Order No. 144.
During the meeting, the council identified several global risks that could affect the Philippines.
While indicators of global market volatility have remained low, fluctuations in global oil prices persist.
Despite a decrease in US inflation, it remains high, suggesting a prolonged period of elevated interest rates that could impact the global economy. Additionally, ongoing geopolitical tensions pose further risks.
For the Philippines, economic growth remains strong and among the highest in the world. Recent data suggests that full-year inflation is unlikely to exceed the upper limit of the target range, providing a stable outlook for the country’s macro-financial trajectory.
“We find comfort in the broad indications of stability and their effects on the economy. These are issues that the FSCC will continue to monitor,” said FSCC chairman and BSP governor Dr Eli M. Remolona Jr. “The volatility in the price and supply of energy-related products can affect economic activity, while a high-for-long global interest rate situation will weigh on debt servicing in general.”
He offered assurances that the FSCC will closely monitor these issues and address them in due course.
One of the risks plaguing the Philippines is cyber, with businesses having seen a rise in cyberattacks in 2023.
According to cybersecurity firm Fortinet, around 60% of surveyed businesses in the Philippines reported a threefold increase in cyberattacks last year, mainly due to the increased accessibility of ransomware to cyber attackers.
Rashish Pandey, Fortinet’s vice president for marketing and communications for Asia, Australia, and New Zealand, noted the existence of a ransomware marketplace.
Focusing on disaster risk, the Government Service Insurance System (GSIS) of the Philippines entered an agreement with the Japan International Cooperation Agency (JICA) to improve the financial resilience of the country’s assets against natural disaster risks.
The deal will see the JICA help the GSIS improve its capability to reference replacement values and ensure the adequacy of insurance coverage.
