The banking industry in the Philippines remains optimistic on the country’s economic prospect amid global uncertainties and market volatility, the latest Banking Sector Outlook Survey for the first semester of 2019 showed.
According to survey results, majority of the respondents projected the gross domestic product (GDP) to grow between 6 per cent and 7 per cent within the next two years.
Similarly, the outlook on the Philippine banking system remains stable, with most of the respondents projecting double-digit growth in assets, loans, deposits and net income.
“The bullish outlook on the banking system indicates that banks will continue to provide an environment conducive to the sustained domestic economic growth,” the Bangko Sentral ng Pilipinas, the country’s central bank, said on its website.
The survey’s new section on Fintech/Cybersecurity Plans underscored the banking industry’s aptitude on the use of technology-enabled solutions and strong interest in participating in the digital finance ecosystem. This is expected to add further impetus to the growth and operational efficiency of banks.
The report also noted that most of the banks planning or already employing technology in their operations find its most important application in areas of data security and privacy, know your customer (KYC) procedures and loan scoring. Moreover, most of the respondent banks revealed preparedness in managing cybersecurity risks.
Meanwhile, institutional risk was considered as the top concern to the banks’ operation which include cybersecurity threat, regulatory/compliance risk, credit risk, and market competition.
Respondent banks considered enhancing their risk management systems to strengthen the banks against potential shocks and external vulnerabilities. Likewise, they planned to strengthen client relationships and upgrade personnel capabilities.
The banking industry survey also noted that lenders recognize the need to keep a high level of risk-based capital and liquidity; and to strengthen organizational conduct and risk culture in order to thrive amid the volatility and complexity of the operating environment.
The Banking Sector Outlook Survey provides insights of bank management on the strategic direction of the industry and emerging risks and trends. This is part of BSP’s surveillance tools in promoting the resilience of the banking system. – © BusinessNewsAsia.com