Stability body crafts crisis pre-emptive rules

The Financial Stability Coordination Council, or FSCC, the multi-agency body monitoring risks in the financial market, approved measures that seek to enhance the resilience of the country's financial system amid the ongoing global inflation pressures.

This council of financial market authorities is composed of the Bangko Sentral ng Pilipinas, or BSP, the Department of Finance, the Insurance Commission, the Philippine Deposit Insurance Corporation, and the Securities and Exchange Commission.

Under Executive Order 144, it is tasked with mitigating systemic risks that threaten the stability of the overall financial system.

These actions cover a broad range of issues, from communication to the capital and contingent markets, as well as having in place both the right tools and better data to pre-emptively manage possible contagion risks.

Several positives identified

BSP Governor Eli Remolona Jr., as the new chairperson of the FSCC, noted that there are several positives marking the local financial market.

The council pointed out that the economy is expanding, headline inflation is falling, employment is generally increasing, and there are no immediate signs of sector-wide pressures among corporates.

"While the high-level indicators are notable, there are many developments that we should still monitor. This is where systemic risk surveillance is critical because we need to assess if and how changing conditions in the global and regional markets mesh with our own domestic situation," Remolona pointed out.

The FSCC observed that global growth prospects are more positive today than several months ago, but there are still evident pressures from the advanced economies, or AE, and even from within Asia.

The Council's Systemic Risk Review highlighted that the growth prospects of the country's major trading partners are expected to diverge.