FSCC monitors global risks to PH financial stability

By Francis Allan L. Angelo

The Financial Stability Coordination Council (FSCC) has identified key global risks that may impact the Philippine financial system during its 39th Executive Committee meeting.

The council reviewed recent offshore market developments, noting that global indicators of market volatility remain low but highlighted concerns over the volatility in global oil prices and persistent US inflation.

FSCC Chairman and Bangko Sentral ng Pilipinas (BSP) Governor Dr. Eli M. Remolona, Jr., emphasized the importance of these issues.

“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,” he said in a press statement.

While US inflation has decreased, it remains high by the Federal Reserve’s standards, suggesting a prolonged period of high policy rates that could impact the global economy.

Additionally, ongoing geopolitical risks have been a significant factor, with recent escalations adding to the uncertainty.

For the Philippines, the outlook remains optimistic. The country’s economic growth continues to be robust, ranking among the highest globally.

Current data indicates that full-year inflation is unlikely to exceed the upper limit of the targeted band, providing the Philippines with a greater degree of control over its macro-financial trajectory.

“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. These are issues that the FSCC will closely monitor and may address in due course, if warranted,” Dr. Remolona said.

The FSCC, an inter-agency body, includes the BSP, Department of Finance, Insurance Commission, Philippine Deposit Insurance Corporation, and Securities and Exchange Commission.

Initially formed voluntarily following the Global Financial Crisis, the council has been institutionalized under Executive Order No. 144.