Philippine financial system stays resilient in 2025

MANILA — The Philippine financial system remained stable in 2025, with banks well-positioned to lend and holding enough capital to absorb unexpected losses, according to the Financial Stability Coordination Council.

The assessment was the key finding of the 2025 Financial Stability Report, which also flagged pockets of risk that regulators said require close monitoring.

FSCC Chairman and Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. said financial regulators will continue strengthening coordination to manage emerging vulnerabilities.

“We will sharpen our coordination by defining when to escalate issues and by clearly communicating our assessment of our respective regulated entities,” he said.

The FSCC identified several risks, including increased leverage across sectors, elevated property prices, higher lending to certain sectors including conglomerates, and the growth of unsecured consumer loans, mostly credit card debts.

The report also cited cyber threats and geopolitical tensions, including the conflict in the Middle East, as additional risks to the financial system.

“These risks underscore the need for vigilance and coordinated oversight among regulators,” the FSCC Chairman and BSP Governor added.

To address emerging vulnerabilities, the FSCC outlined measures aimed at strengthening safeguards across the financial system.

These measures include activating a tool that would require banks to set aside additional capital during good times.

The council also called for stronger oversight of non-financial corporations, especially complex conglomerates.

The FSCC said regulators also need to expand data coverage for non-bank financial institutions.

The report further cited the need to operationalize a systemic crisis management playbook.

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

The BSP says the FSCC convenes regulators to assess systemic risks and decide on appropriate macroprudential policy interventions, while financial stability is also part of the central bank’s mandate under Republic Act No. 11211.

The council’s role was institutionalized under Executive Order No. 144, which formally established it as an inter-agency body composed of the BSP, DOF, SEC, IC, and PDIC.

The Financial Stability Report is issued annually by the FSCC and provides an assessment of the health of the Philippine financial system in light of systemic risks.

The 2025 report can now be downloaded from the websites of the BSP and other FSCC member agencies.

The BSP describes the Financial Stability Report as a publication that provides in-depth analysis of developments and potential risks that may have financial stability implications for the Philippine financial system.