The Central Bank of the Philippines (BSP) issued updates on several financial sector initiatives, including those in the areas of sustainable finance, and digital banking, and the deposit insurance system in the Philippines. BSP continues to strengthen the domestic and international engagement to intensify its campaign for the adoption of sustainable finance principles and announced that it plans to conduct vulnerability assessments and stress testing exercises with volunteer banks. BSP plans to conduct these exercises in partnership with the World Wildlife Fund Philippines, the World Bank, and the industry associations. The campaign for the adoption of sustainability principles is in line with the BSP’s Sustainable Finance Framework issued under Circular No. 1085.
In a separate development, BSP also published initiatives that aim to support the digital transformation initiatives of the supervised financial institutions, including fintech players, while promoting sound risk technology and cyber risk management. These initiatives include:
- Transitioning to a new "supervisory rating framework," which hinges on stronger off-site supervision
- Amendment of the E-Money and Technology Outsourcing Circulars and formalization of its test-and-learn approach or regulatory sandbox
- Issuance of digital banking policies to encourage better delivery of financial services by digital banks
- Open finance activity to promote greater interoperability and collaboration among financial institutions and fintech firms
BSP also announced that the Monetary Board decided to close the window for the submission of applications from new digital banks, including converting banks, starting August 31, 2021. This is in line with the overall thrust of maintaining a stable and competitive environment for banks. Digital bank applications received until August 31, 2021 will be processed on a first-come, first-served basis and will be assessed for completeness and sufficiency of documentation/information as well as compliance with the licensing criteria on the establishment of digital banks. Applicants that are able to submit the complete documentation on or before the said closure date will be processed by BSP. To date, the Monetary Board has approved the application of five digital banks, including two incumbent banks that have converted their existing licenses to a digital bank license. The three digital banks are UNObank, UnionDigital Bank, and GoTyme, while Overseas Filipino Bank Inc and Tonik Bank are the banks that converted their existing license to digital banks. The Monetary Board approval corresponds to the first of the three-stage licensing process. Meanwhile, BSP is processing two other digital bank applications.
In another update, BSP announced its support for the legislative initiatives to amend the charter of the Philippine Deposit Insurance Corporation (PDIC). The proposed amendments include organizational reforms that will make the PDIC an attached agency of BSP, which is the regulator of the banking industry. Supported by the International Monetary Fund (also known as IMF), the reform initiative is expected to enhance synergy among BSP, PDIC and other domestic financial regulators in promoting the financial stability in the country. BSP looks forward to continuing coordination with the legislature and the PDIC for the immediate passage of the bill that will amend the PDIC charter.
- Press Release on Sustainable Finance
- Press Release on Digital Initiatives
- Press Release on Digital Banks
- Press Release on PDIC Charter
Keywords: Asia Pacific, Philippines, Banking, Digital Banks, Sustainable Finance, PDIC Charter, Vulnerability Assessments, Stress Testing, Open Finance, PDIC, Bank Licenses, Climate Change Risk, Scenario Analysis, Deposit Insurance, Regtech, Regulatory Sandbox, BSP
Previous ArticleBIS and Central Banks to Test CBDC Use for International Settlements
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.