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BSP chief Medalla: Silicon Valley Bank collapse won’t trigger financial crisis

Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla has downplayed the collapse of Silicon Valley Bank in the United States, saying it will not have an adverse impact on the country's financial system.

"No. It will not trigger another financial crisis," Medalla told GMA News Online.

The BSP governor was asked to comment on the shutdown of Silicon Valley Bank and whether it would cause another financial crisis in the country.

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 of securities.

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

Medalla said that there is "no reported exposure of Philippine banks to Silicon Valley Bank."

"Philippine banks have strong balance sheets," he said.

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.

BAP said 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. —VBL, GMA Integrated News