IMF Executive Board Concludes Financial System Stability Assessment with Philippines HTML File
IMF Executive Board Concludes Financial System Stability Assessment with Philippines
April 9, 2021
Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Financial System Stability Assessment
[1] with the Philippines on March 5, 2021.
The work of the Financial Sector Assessment Program (FSAP) was conducted during the COVID-19 outbreak, with the virtual missions concluding on October 20, 2020, and adapted to include the immediate risks and vulnerabilities brought up by the pandemic.
The economy faces both COVID-related and structural risks. Real GDP contracted by 9.5 percent in 2020-a much steeper decline than during the Asian Financial Crisis. However, it is now recovering, and macroeconomic fundamentals at the onset of the COVID-19 were stronger than in the late 1990s. In addition, the Financial Action Task Force (FATF) may put the country on the so-called grey list in 2021 without significant reforms on the effectiveness of the Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regime. However, significant legislative measures were enacted in early 2021 to address some of the FSAP recommendations. The Philippines is also vulnerable to increased typhoon risks from climate change owing to its geographical position.