The Financial Stability Coordination Council (FSCC) recently held its 39th Executive Committee meeting to evaluate the latest global market trends and their potential impacts on the Philippine financial landscape.
The FSCC, an inter-agency body, comprises the Bangko Sentral ng Pilipinas (BSP), the Department of Finance, the Insurance Commission (IC), the Philippine Deposit Insurance Corporation, and the Securities and Exchange Commission. Originally a voluntary assembly formed post-Global Financial Crisis, it gained official status through Executive Order No. 144.
Identified Global Risks Impacting the Philippines
During the meeting, the FSCC identified several global risks with potential repercussions for the Philippines. Although global market volatility indicators remain low, there are persistent fluctuations in global oil prices.
Despite a reduction in US inflation, it continues to be high, indicating a likely extended period of elevated interest rates, which could affect the global economy. Moreover, ongoing geopolitical tensions present additional risks.
Despite these challenges, the Philippines continues to show robust economic growth, ranking among the highest globally. Recent data indicates that the full-year inflation rate is unlikely to breach the upper limit of the target range, contributing to a positive macro-financial outlook for the country.
“We find comfort in the broad indications of stability and their effects on the economy. These are issues that the FSCC will continue to monitor,” remarked FSCC chairman and BSP governor Dr. Eli M. Remolona Jr. “The volatility in the price and supply of energy-related products can affect economic activity, while a high-for-long global interest rate situation will weigh on debt servicing in general.”
He assured that the FSCC will diligently monitor these issues and address them as necessary.
Surge in Cyberattacks
Another pressing issue for the Philippines is the significant rise in cyberattacks, with businesses reporting a surge in such incidents in 2023.
According to cybersecurity firm Fortinet, approximately 60% of surveyed businesses in the Philippines experienced a threefold increase in cyberattacks last year. This rise is primarily attributed to the growing accessibility of ransomware to cybercriminals.
Rashish Pandey, Fortinet’s vice president for marketing and communications for Asia, Australia, and New Zealand, highlighted the existence of a ransomware marketplace, exacerbating the situation.
Partnership with Japan to Enhance Disaster Risk Insurance
On the front of disaster risk management, the Government Service Insurance System (GSIS) of the Philippines has entered into an agreement with the Japan International Cooperation Agency (JICA) to strengthen the financial resilience of the country’s assets against natural disasters.
This partnership will see JICA assisting GSIS in improving its capability to reference replacement values and ensuring the adequacy of insurance coverage.
Through these collaborative efforts and vigilant monitoring, the FSCC aims to safeguard the Philippine financial system against both global and domestic challenges.
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