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Silicon Valley Bank collapse has no 'substantial' impact in PH banks —BAP

The Bankers Association of the Philippines (BAP) on Tuesday said the Philippine banking system is strong and stable amid the collapse of Silicon Valley Bank in the United States —described as the American banking sector’s biggest failure since the 2008 financial crisis.

In a statement, BAP assured the public that recent developments in the US financial system “have no substantial or material impact on Philippine banks.”

Last week, news broke that Silicon Valley Bank, which specializes in financing startups, was shut down and its assets were seized by US authorities after it took a loss of $1.8 billion in the sale of $21 billion worth in securities. 

Silicon Valley Bank’s collapse was feared to trigger a potential spillover across the entire US banking system. 

In the Philippines, BAP said that banks “have diversified deposit bases that include all sectors of the Philippine economy, allowing them to continuously provide the liquidity needs of their clients.”

“Additionally, banks in the Philippines continue to have capital and liquidity ratios that exceed the requirements set by the Bangko Sentral ng Pilipinas (BSP),” the bankers group said.

BAP said the prudential measures implemented by the BSP provide the necessary support that allows the Philippine banking system to withstand economic shocks.

“The BAP continues to work with BSP and other stakeholders to pursue reforms that will lead to an even stronger financial system that sufficiently provides the financial needs of the banking public,” it said.

BAP counts as members some of the country’s largest local banks such BDO Unibank, Bank of the Philippines Islands, East West Bank, Development Bank of the Philippines, Land Bank of the Philippines, Metrobank, Philippine National Bank, Union Bank, Security Bank, Rizal Commercial Banking Corp.; and several foreign banks including Citibank, ING Bank, JP Morgan Chase Bank, and Standard Chartered Bank. —VAL, GMA Integrated News