Accounting as the Language of Business · Bank Branches (70%), ATMs (61%) & pawnshops (52%) remain...
Transcript of Accounting as the Language of Business · Bank Branches (70%), ATMs (61%) & pawnshops (52%) remain...
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Accounting as the Language of Business:Some Perspectives from the Bangko Sentral
Hon. Benjamin E. Diokno
Governor
Bangko Sentral ng Pilipinas
First National Summit of CPAs in Commerce and
Industry (NSCCI)
30 January 2020
Century Park Sheraton, Manila
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1 Overview of Macro-Financial Developments
2 Banking System Status and Outlook
3 BSP Financial Sector Reform Agenda
4 Policy Direction
5 Concluding Thoughts
THIS PRESENTATION
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1. Overview of Macro-Financial Developments
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0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
PHP THB MYR IDR SGD VND CNY
SD / Ave USD RateDaily Closing Rates from January 2018
Source of Data: Bloomberg
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Comparative Real Bond YieldAs of October 2019
Source: Bloomberg
Despite global uncertainties, the Philippines, backed by solid macroeconomic fundamentals and prudent policy reforms, remains among the fastest growing economies . . .
4
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Jan
Jun
No
v
Ap
r
Sep
Feb
Jul
Dec
May Oct
Mar
Au
g
Jan
Jun
No
v
Ap
r
Sep
Feb
Jul
Dec
May Oct
Mar
Au
g
Jan
Jun
No
v
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
PH Monthly Inflation DataIn Percent
Source: PSA
In Percent
-
2.0
4.0
6.0
8.0
2016 2017 2018 2019Q1 2019Q2 2019Q3 2019Q4
Comparative Real GDP GrowthAs of End-Periods Indicated
Philippines Malaysia Indonesia Thailand
Singapore Taiwan China Vietnam
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18.5 23.0 33.8 37.6 44.2 62.4 75.3 83.8 83.2 79.5 80.7 80.7 81.6 79.2 79.2 87.8
4.65.1
6.7 6.4
9.2
10.411.6 11.5 11.6
9.9 9.9
8.87.8
7.0 6.97.7
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 end-Dec2018
end-Dec2019
Gross International Reserves (in Billion US$) and Months of Imports CoverAs of End-Periods Indicated
GIR
Import cover
Source: BSP
12.814.4
16.4 17.318.8
20.121.4
23.024.6 25.6
26.928.1 28.9
26.1 27.2
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Nov2018
Nov2019
Cash Remittances (in Billion US$)4.4% YOY growth for Jan-Aug 2019
Source: BSP
. . . with adequate buffer against and global volatilities.
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2. Banking System Status and Outlook
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Banking assets rising along with expanding economy
Strong funding base for credit expansion
Loans continued to drive expansion in banks’ asset base
Banking system sustains robust performance as key performance indicators show further strengthening of banks’ balance sheets . . .
95.7%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Bank Assets (LHS) Nominal GDP (LHS) Bank Assets to Nominal GDP (RHS)
In Billion Pesos (LHS) In Percent (RHS)
Bank Assets as a Share of GDPAs of End-Periods Indicated
Source of data: BSP p/ Preliminary data
* Refers to economic sectors under the 2009 PSIC.
Loan expansion remain broad-based
0
3,000
6,000
9,000
12,000
Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Nov-19
Philippine Banking SystemGross TLP by Economic Activity*
As of End-Periods Indicated, In Billion Pesos
Manufacturing Wholesale and Retail Trade
Real Estate Activities For Household Consumption
Others (18 remaining sectors)
-
3.0
6.0
9.0
12.0
15.0
18.0
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Nov-18 Nov 19
Philippine Banking SystemAsset Trends
As of End-Periods Indicated, In Trillion Pesos
Cash and Due from Banks Loans Investments Other Assets
-
3.0
6.0
9.0
12.0
15.0
18.0
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Nov-18 Nov-19
Philippine Banking SystemFunding Sources
As of End-Periods Indicated, In Trillion Pesos
Deposits Borrowings Other Liabilities Capital
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Risk-Based Capital: Well beyond domestic and global norms Liquidity: Ample level of liquidity with adequate HQLAs
8Source of data: BSP p/ Preliminary data
* These refer to economic sectors under the 2009 PSIC.
. . . while risk management remains relatively strong.
171.2
90
100
50
100
150
200
Sep
'17
De
c'1
7
Jan
'18
Feb
'18
Mar
'18
Ap
r'1
8
May
'18
Jun
'18
Sep
'18
Oct
'18
No
v'1
8
De
c'1
8
Jan
'19
Feb
'19
Mar
'19
Ap
r'1
9
May
'19
Jun
'19
Sep
'19
U/KBs LCR ComplianceAs of End-Periods IndicatedIn Percent
U/KBs Minimum Requirement
15.2
15.6
13.514.2
0
2
4
6
8
10
12
14
16
18
20
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Universal and Commercial BanksComposition of Capital (Solo Basis)
As of End-Periods Indicated, In Billion Pesos, Ratios in Percent
CET1 Capital (LHS)Other TQC (LHS)CAR (RHS)CET1 Ratio (RHS)
minimum CAR requirement
minimum CET1 Ratio requirement
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Grow the business Expand client base, invest in technology, and develop new products
Optimize technologyDigitize operations and customer service, leverage on technology for strategic efficiency
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Top 2 Strategic Priorities
1
2
For the next two years, the banking system aims to . . .
Develop new
capabilities
Expand market
reach
Leverage on
client
relationships
Plans to achieve growth
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3. BSP Financial Sector Reform Agenda
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The BSP’s Strategic Financial Sector Reform Agenda
Strengthening risk governance
Leveraging on technology in finance and the use of artificial intelligence
Achieving greater and broader access to financial services
Upholding the integrity of the financial system and safeguarding the interest of the public
Accelerating capital market reforms, including foreign exchange liberalization
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Price
Stability Financial Stability
Safe and Reliable
Payments System
STRENGTHENS BSP’S PRICE AND FINANCIAL STABILITY FUNCTIONS
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The BSP Charter Amendment
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The BSP Financial Inclusion Agenda – Inclusive, Digital Financial Ecosystem
Efficient retail
payment system
Sustainable Finance
Democratize access to
transaction account
Expand financial
access points
Islamic Banking
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The National Retail Payment System
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Frontier credit markets
Sustainable finance
Islamic banking
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Formal Savings*
Overall Access Situation
526 out of 1,634 cities and
municipalities have no banking
office as of end-June 2019
32.2%1,566 out of 1,634 cities and
municipalities have at least one
access point as of end-June 201995.8%
Account
Ownership*Payments*Loan Incidence* Access Points*
22.6% of total Filipino
adult population have
a formal account, a
modest improvement
from the 2015 estimate
of 22%
48.0% of total adult
population had savings
in 2017, a notable
increase from the 43%
recorded in 2015
22.3% of Filipino
adults reported having
an outstanding loans
in 2017, a substantial
decline from the 47.1%
in 2015
18.0% only of Filipino
adults with an account
use it for payments (or
4% of the total adult
population)
64.0% or two-thirds
of adults who did not
use their accounts for
payments still prefer
cash payment while
20% are not aware of
electronic payment
using their account
Bank Branches
(70%), ATMs (61%)
& pawnshops (52%)
remain the most
popular financial
access touch points in
terms of awareness,
accessibility, & usage
“Based on the 2017 BSP Financial Inclusion Survey
Fintech is a great enabler towards a more inclusive financial system
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The BSP’s Fintech Roadmap
Collaborative Engagements
Commensurate Regulations
Capacity Building
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Banking System
✓ FX Market
Governance
Framework
✓ Corporate
Governance
✓ Supervision of
conduct and culture
✓ Supervisory
Approach
Framework Review
(SAFR)
✓ Basel III Reforms –
standardized
approach to credit
and operational risks,
etc
✓ Revised Pillar 3
Disclosures
✓ Basel standards on
large exposure
4. Future Policy Direction
✓ Risk-Based Pricing
✓ Model Risk Mngt
✓ Reputational Risk
Mngt
✓ Intraday liquidity
reporting
Other Financial Sector Reforms
✓ Sustainable
Finance
Framework
✓ Bill on Financial
Consumer
Protection
✓ Comprehensive
Amendments
to Agri-Agra
Law (RA 10000)
✓ NRPS expansion
✓ Large value
transfers
✓ Regtech and
Suptech
✓ Enhanced
Collaboration
with other
Agencies (FSF,
Industry
Associations)
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4
2
3
1
BSP stands ready to provide enabling regulatory environment.
Financial technology and digitization are shaping the future
landscape of Philippine banking system.
The Philippine banking system grows alongside the economy to
facilitate efficient financial intermediation.
Strong macroeconomic fundamentals support Philippine economic
growth.
5. Our Key Takeaways
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Accounting as the Language of Business:Some Perspectives from the Bangko Sentral
Hon. Benjamin E. Diokno
Governor
Bangko Sentral ng Pilipinas
First National Summit of CPAs in Commerce and
Industry (NSCCI)
30 January 2020
Century Park Sheraton, Manila