THE banking industry may have been affected by the economic fallout caused by the Covid-19 pandemic, but it remains strong and resilient.
Cebu Bankers Club president Romeo Comabig shared this view, following the release by the Bangko Sentral ng Pilipinas (BSP) of the country’s latest Financial Stability Report (FSR) made by the Financial Stability Coordination Council (FSCC).
“Banks may be affected by the slowdown of the economy, but we are flexible to absorb such contingencies,” he told SunStar Cebu.
Comabig said deposits also remain high and that banks have already set aside a portion of their income to absorb the past due and defaults as expected during the economic slowdown brought about the pandemic.
In a press statement on the release of the FSR for the second semester, Philippine Deposit Insurance Corp. (PDIC) president Roberto Tan said, “The good news for the banking industry is that it remains strong despite Covid-19.”
While deposit insurance is in place as a critical safety net, Tan reminded the banking public not to be complacent.
He noted the effect of Covid-19 on household and corporate incomes.
Meanwhile, BSP Gov. Benjamin Diokno, chairman of the FSCC, said Covid-19 is unprecedented and several multilateral agencies expect that it will leave “scars” on the economy.
Among the challenges brought about by Covid-19 is how stakeholders can move forward when changes in the economy are still unfolding.
“We traditionally forecast into the future by using economic models which are empirically estimated based on behaviors displayed during normal times,” Diokno said in a statement.
The challenge, according to Diokno, is that Covid-19 is changing the preferences of consumers and the risk behaviors in financial markets.
The FSCC is a voluntary interagency body made up of the BSP, Department of Finance, Insurance Commission, PDIC and the Securities and Exchange Commission. (JOB)