BSP heightens scrutiny of COVID impact on banks

The Bangko Sentral ng Pilipinas (BSP) is polishing up its supervisory and surveillance toolkits to determine the effects of emerging new COVID-19 variants on the banking sector.

“The BSP will continue to closely monitor the impact of emerging COVID-19 variants on the banking system,” said BSP Governor Benjamin E. Diokno in an economic forum on Tuesday, March 1.

BSP Governor Benjamin E. Diokno

Diokno said the “supervisory and surveillance tools have been strengthened to ensure that appropriate focus and attention are placed on this area.”

The BSP reported last week that banks’ operations have resumed most of its full capacity after being forced to close regular branches or branch-lite units during the COVID Omicron surge in the first weeks of January.

Diokno told reporters that from the peak in COVID-19 cases in early January, bank operations have started to normalize by end-February. He also said the number of temporarily closed branches and branch-lite units of BSP supervised financial institutions has dropped to 167 on Jan. 31 from a high of 2,196 on Jan. 11.

After the Omicron variant, which similar to the Delta variant is a rapid spreader, the World Health Organization has not yet identified any new variant that could be as infectious as the other two variants of SARS-CoV-2, the virus that causes COVID-19.

During the Tuesday forum, the BSP chief said that after two years of the pandemic, the local economy is finally on its way to sustaining a growth momentum due to the government’s accelerated mass vaccination program.

“Considering the recent economic developments and continued improvement in vaccination efforts, we are optimistic that there is sufficient support for the country’s recovery in the near term. The management of risks through calibrated quarantine restrictions, the expected revitalization of key industries due to government policy support and structural reforms, and the improvement of the global economy should help the economy to accelerate in 2022,” said Diokno.

The BSP’s GDP growth assumption, similar with the government, is seven to nine percent this year and six to seven percent in 2023.

“The restoration of global growth with the easing of restrictions in many jurisdictions along with increasing vaccination rates and improving jobs market could contribute to domestic recovery through improvements in exports and remittances,” he said.

However, Diokno reiterated that economic recovery will be uneven between advanced and emerging market economies.

“The path to recovery will depend on the reach of mass vaccination and the effectiveness of policy support. Furthermore, the uneven exit from the pandemic may pose varied challenges to policymakers, as tightening monetary conditions in advanced economies may affect the recovery path of emerging economies that rely on international financing,” he added.

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Credit belongs to : www.mb.com.ph

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