The Philippine banks have agreed on liquidity boosting measures to shield the local financial market from shocks caused by the global financial turmoil, a bankers' organization said on Friday.
"We have adopted three resolutions all meant to further increase liquidity, the oil of the economic engine, and keep the economy strong amid current external challenges and position if for the recovery of the global economy," said a statement released by the Bankers Association of the Philippines.
The association now requires all the members to release more dollars into the banking system by keeping only half of the amount allows within their facility.
Dollar sales will be limited only for outward investments but funds for foreign direct investments will be readily available, according to the statement.
The group encourages more active lending between members through the inter bank repurchase facility to ensure that each bank can access funds needed by its clients.
The measures are necessary despite the country's strong economic fundamentals and well-capitalized banking system, said the group's president Aurelio Montinola, quoted by Philippine TV network GMA News.
"We have to prepare because we know that the financial storm that started in the United States has spread to Europe and is now reaching Asia and the Philippines," Montinola said.
Adopting liquidity measures are in line with government efforts to keep the banking system healthy amid the liquidity crunch stemming from developed markets which is hurting emerging economies like the Philippines, the group said.
The Philippine central bank BSP has provided relief measures including the dollar repurchase facility for banks and the reclassification of financial assets to ensure that the banking system maintains its adequate liquidity level.
Source:Xinhua
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