Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Thursday domestic banks can withstand any impact of major disruptions on their operations, including natural hazards like typhoons.
Diokno said in an online briefing the issuance of the Environmental and Social Risk Management Framework in October 2021 provided expectations on the management of environmental and social risks.
Subsequent phases of regulations will cover the areas of investment activities of banks, climate stress testing, disclosure requirements, prudential reporting and potential regulatory incentives.
Under the framework, banks are expected to assess the vulnerability of their operations, systems and offices and branches to physical risks and other natural disasters. The results of the assessment should feed into the potential enhancement of banks’ business continuity plans.
“The banking system is prepared to weather the impact of major disruptions. Regulations are already in place to ensure continuity in their operations… Banks have business continuity plans to activate,” he said.
This was Diokno’s response when asked on the impact of Typhoon Odette on the banking system, following reports that some banks’ operations were affected.
“We are in close coordination with the affected areas… but BSP branches are fully in service in Visayas and Mindanao,” he said.
Latest government data showed that the estimated damage of Typhoon Odette reached P388 million as of Dec. 21. Of this amount, the cost to infrastructure amounted to P225 million, including government facilities. The cost to agriculture hit P163 million.
The BSP issued the ESRM framework in line with its commitment to champion the sustainability agenda in the financial system. The framework is expected to take effect in 2023 consistent with the effectivity of the Sustainable Finance Framework.