On Nov. 18, PHI CB issued report on systemic risks faced due Covid.
PHI CB announced financial stability coordination councilFSCC new report, next steps.
FSCC assessed the systemic risks now being faced, because of the Covid-19 pandemic.
It also defined its initiatives to mitigate adverse consequences, achieve new economy.
2nd Semester 2020 FSR is the result of a deliberate decision to shift from an annual to a periodic release of report, as a response to the faster-changing conditions in 2020.
Concluded banking industry remains strong despite Covid-19, but deposit insurance as a critical safety net is in place, and also reminded everyone not to be complacent.
On the effect of Covid on household and corporate incomes, Philippine deposit insurance corporation (PDIC) president pointed to global concern over slow burn contagion where vulnerabilities at the firm level could spread to other firms.
Stated these are reminders to PDIC that liquidity risk takes on a more immediate role.
SEC chair, Emilio B Aquino, said liquidity is coveted, credit has slowed, risk premiums have risen which he described as rational risk-aversion for a market under uncertainty.
All FSCC leaders agreed on the need to move forward, noted the FSR revealed the changes resulting from the pandemic are more likely to impose fundamental changes.
FSCC chair said that, together with the premium on physical space and an irreversible trend towards digitization, changing behaviors give the FSCC reason to re-assess.
New economy expected to operate under a different set of market arrangements.
Firms will need to adopt new business models, market distinguished by new behaviors.
And authorities must account for systemic risks when overseeing market functions.
As the pandemic continues, must implement timely, effective monetary, fiscal policies.
These are crucial to the management of evolving systemic risks during uncertainty.
FSCC will continue to be vigilant against the risks posed by the pandemic, while taking advantage of opportunities that will help restore the country's growth trajectory.