MANILA, Philippines — The Bangko Sentral ng Pilipinas said Friday it is ready to respond to any contagion effects following failures of two midsized US banks, which sparked fears that more lenders could suffer a run by depositors.
But for now, the BSP said the local banking system “remains safe and sound”, adding that Philippine banks do not have any material exposure to the collapsed US banks.
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“The BSP recognizes the actions taken by banking supervisory authorities to address the potential contagion risk from the closure of banks,” the central bank said.
“Nonetheless, we will respond accordingly as market conditions evolve,” it added.
The BSP statement comes on the heels of emergency measures taken late Sunday by the Federal Reserve and other US regulators to assure all depositors of two failed banks, Silicon Valley Bank and Signature Bank.
On Thursday, the Fed said it has lent US banks close to $12 billion under a new one-year lending program unveiled Sunday as authorities moved to ease stress on the financial system.
With the seizure of SVB and Signature, an additional $142.8 billion was poured into the bridge banks created by regulators for the two collapsed banks, pushing the Fed's balance sheet up by about $300 billion in the past week.
Last Friday's SVB failure has sparked concerns about a contagion effect. The crisis has also spread to Europe, with the Swiss central bank intervening to support Credit Suisse after it came under pressure. — with AFP