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Diokno admonishes Congress not to unduly weaken banks

By Lee C. Chipongian

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno reminded lawmakers that banks have a “key role” in jumpstarting the economy amid and post-pandemic and politicians should not “unduly weaken” this crucial industry.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno. (Bloomberg photo)

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno. (Bloomberg photo)

“Philippine banks will play a key role in the recovery process,” said Diokno yesterday. “Congress should not weaken them.”

There’s a pending bill at the Lower House, the proposed House Bill No. 6622 or the Philippine Banking Industry Resiliency Act Against COVID- 19, and Diokno has strong words for members of the House of Representatives while the bill is being deliberated.

“Cong r e s s should be caut ious no t to unduly weak¬en (the bank¬ing sector),” he stressed, because financial institutions are one of key sectors adversely impacted by the imposed containment and lockdown measures as a government response to COVID-19.

The BSP chief seemed disappointed on how Congress are handling the proposed FIST Law. “(There are) many proposals; some well thought out; others not,” he said. The House Committee on Banks and Financial Intermediaries ap¬proved the bill for amendments last May 11.

Diokno said the banking sector remains “ s t rong and well-capitalized” and that the industry “is one of the pillars of strength of the Philippine economy going into this once-in-a lifetime health and economic crises.”

“Philippine banks will play a pivotal role in the post-coronavirus recovery process,” he said yesterday.
Despite the poor performance of the economy due to the pandemic, Diokno said banks banks are not only well-capitalized but have strong liquidity positions and more importantly, non-performing loans (NPLs) are still manageable.

But the pandemic hit various industries where banks “may have substantial exposures to,” Diokno told an online forum. “As the economy gradually moves beyond quarantine, the amplification of strains in the whole financial system have yet to be revealed.”

“Given the possibility of higher defaults and NPLs, there may be scope to offer more debt restructuring measures,” said Diokno.


Source: Manila Bulletin (https://business.mb.com.ph/2020/06/01/diokno-admonishes-congress-not-to-unduly-weaken-banks/)

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