The Philippines Financial Stability Coordination Council has published its 2025 Financial Stability Report, concluding that the Philippine financial system remained stable in 2025, with banks well positioned to lend and holding sufficient capital to absorb unexpected losses. The report also identifies pockets of risk that require close monitoring, including rising leverage across sectors, elevated property prices, higher lending to certain sectors including conglomerates, and growth in unsecured consumer loans, mostly credit card debt. Additional risks cited include cyber threats and geopolitical tensions, including the conflict in the Middle East. To address emerging vulnerabilities, the council outlined measures to activate a tool that requires banks to build additional capital in good times, strengthen oversight of non-financial corporations especially complex conglomerates, expand data coverage for non-bank financial institutions, and operationalize a systemic crisis management playbook. It also said regulators will sharpen coordination by defining when issues should be escalated and by communicating their assessments of regulated entities more clearly.

Original source Back to tracker