towards a resilient and inclusive financial sector

TOWARDS A RESILIENT AND INCLUSIVE

FINANCIAL SECTORTHE PHILIPPINE ECONOMIC DEVELOPMENT PLAN

2011 -2016TRES BIEN

2

Current Structure of the Financial SystemCondition and Performance

ASSESSMENT

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Current Structure of the Financial System

“The Philippine financial system is primarily bank-based rather than capital market-based”

The banking sector plays the primary role in financial intermediation and is the main source of credit in the economy.

Non-bank financial institutions claim only 17 percent of economic output in 2010.

The Philippine Stock Exchange’s (PSE) market capitalization as a percentage of economic output remained small.

Our mutual funds are considered smallest in Asia

Foreign participation in the financial system remains limited

A growing concentration in the high-income and urbanized areas of NCR, Central Luzon, and CALABARZON

Towards a Resilient and Inclusive Financial Sector April 8, 2023

4

Condition and Performance

April 8, 2023Towards a Resilient and Inclusive Financial Sector

Banking Sector- remains the core of the financial system and primary source of credit for the economy

Equities Market- showed signs of recovering from depressed global market sentiments in 2007-2009

Fixed Income MarketTotal volume traded at the Philippine Dealing and Exchange Corporation (PDEx) for 2010 more than double its previous YTD’s level

Foreign Exchange and Bond MarketsThe domestic financial market has started to realize gains from improving market and investor sentiments. The peso strengthened against the US Dollar while sovereign credit spreads tightened

5

Institutionalized Generation of Savings and Mobilization of ResourcesAvailable Savings are Primarily Lodged in Short- Term InstrumentsLack of a Thriving Capital MarketImproving the Financial Governance FrameworkFinancial Institutions Concentration in Urban AreasNeed for Legislative Support in Critical Reform Areas

CHALLENGES

6

Vision for the Financial SectorMedium-Term Development Plan for the Financial SectorKey Reforms and Objectives TargetsSpecific Reform Strategies

STRATEGIC FRAMEWORK

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Vision for the Financial Sector


A regionally responsible, development-oriented and inclusive financial system which provides the needs of its diverse public are guided by the following:

Bootom-up development

Top-down infrastracture support

Prices that fully reflect relevant information

Enabling environment for the effective management of risks

8

Medium-Term Development Plan for the Financial Sector


A good financial system in banking and in capital markets should be assisted by the following guidlines:

A conductive policy and regulatory environment

Progressive adoption of intrnational standards and best practices

Good governance

Transparency for the effective delivery of financial services

9

Key Reforms and Objectives Targets


To achieve 7 to 8% growth in he country's economic output beginning 2011with a minimum of 5% growth annually for 6 years

An increase of US $3000 per capita income over the 6 year period

10% reduce of poverty incidence per year

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Key Reforms and Objectives Targets


Focus on:

To promote savings generation at the regional level but having deployment of resources at the national level

To developan enabling environment for long-term savings

To strengthen the good governance of financial system that meet the international standards and best practices

To establish a strong legal framework for financial sector development

11

Specific Reform Strategies


Promote a regionally responsive and inclusive financial system through institutionalized savings generation and resource mobilization

Develop an enabling environment for long-term investments

Strengthen the governance framework of the financial system in line with best practices and standards

Establish a strong legal framework for financial sector development

12

Oriel Anne Guno

Catherine Grace Custodio

Thank you for listening


towards a resilient and inclusive financial sector

Documents