The Philippines' Financial Stability Coordination Council (FSCC) launched its Systemic Risk Crisis Management (SRCM) framework yesterday.
The SCRM involves the continuous surveillance of risk trends; review of infrastructure; conduct of systemic stress tests; and arrangements for communications both under normal and stressed conditions. The FSCC comprises the central bank (Bangko Sentral ng Pilipinas or BSP), Insurance Commission, Philippine Deposit Insurance Corp (PDIC), Securities and Exchange Commission (SEC), and the Department of Finance.
The SRCM framework was “in keeping with the objective of managing systemic risks and strengthening the resilience of the system,” BSP governor Benjamin Diokno said in a speech at the launch ceremony.
“It defines arrangements among the FSCC agencies that we will rely on in good times so that we are best organised under stressed conditions,” Mr Diokno said. “As we develop the tactical plans that underpin this strategic document, the SRCM is thus a living document that evolves with the market and the needs of its stakeholders.”
Mr Diokno said the SRCM will monitor risks during good times so that the domestic economy will be prepared for times of stress. “We look at all the possible risks, not only on the part of the public sector, but also on the part of the private sector.”
He said that at present, he did not see any domestic-caused risks to the financial system as most challenges emerge externally, such as slowing global growth, higher oil prices due to Russia’s invasion of Ukraine, as well as the US Federal Reserve’s interest rate hikes. “But other than that, we don’t see any risk for the Philippine economy.”