THE BANGKO SENTRAL ng Pilipinas (BSP) and the Philippine Deposit Insurance Corp. (PDIC) signed a revised memorandum of agreement (MoA) on information sharing earlier this month.
BSP Governor Eli M. Remolona, Jr. and PDIC President and Chief Executive Officer Roberto B. Tan led the signing of the revised MoA on information exchange on Feb. 8 at the BSP’s head office in Manila.
“The MoA signing signifies the two agencies’ strong collaboration and shared vision for a resilient and responsive financial sector,” the central bank said in a statement on Wednesday.
Mr. Remolona said regulation and supervision have changed over the years for both the BSP and the PDIC.
“We have moved from a very prescriptive examination and supervision style to a risk-based, more principles-based supervision. We do not tell banks specifically what to do. We tell banks to take risks seriously, and that is the reason for all these regulatory standards,” he said.
He also noted the crucial role of deposit insurance in managing runs, which is considered the biggest risk for banks.
“I enjoin everyone, as stewards of this Revised MoA, to follow through on your commitments to keep the Revised MoA updated, relevant, and operational in pursuit of our primary objective of promoting financial system stability,” he added.
According to the BSP, the revised MoA updated the agreement dated Nov. 12, 2002 and the supplemental MoA signed in 2004.
The agreement covers information, data, and reports shared between the central bank and the PDIC.
It also includes continuous information sharing through digital platforms and rationalized processes, the use of the BSP Electronic Information System between the two agencies, and the periodic review of the MoA to consider evolving supervisory requirements.
The prudential reporting requirements of banks will also be streamlined, as banks are no longer required to submit some reports separately to the PDIC, the BSP said.
“Transparent communication between us provides opportunities for a comprehensive understanding of potential risks, enabling us to draw up preemptive measures, detect challenges early, and promptly intervene to immediately address problems among banks to make it responsive to the changing times,” Mr. Tan said.
“The collaboration between our institutions becomes even more paramount and imperative to protect the depositing public, especially from frauds and scams that have become even more elaborate and complex,” he added.
The BSP and PDIC jointly conduct examinations of banks to ensure the stability of the financial system.
The PDIC also issues rules and regulations to help protect the deposit insurance system and the depositing public. – Keisha B. Ta-asan
