Philippine banks toughen up governance

The policy-making monetary board of the Bangko Sentral ng Pilipinas (BSP) has approved stringent corporate governance rules for banks in a bid to create well-run financial institutions, Business World Online reports.

The move will ensure not only the adoption of sound banking practices, but will also increase the public's confidence in banks, say BSP and banking officials.

According to The Manila Bulletin, BSP governor Amando Tetangco Jr says the amended rules and regulations are part of BSP's initiatives in strengthening governance structures in line with global governance practices employed by the Paris-based Organisation for Economic Co-operation and Development (OECD).

“Basically, the new circular raises the governance standards and places them closer to the OECD principles of good governance,” says Tetangco.

ABS-CBNnews.com states that as a pre-emptive move to keep inflation expectations well anchored, the BSP raised interest rates by 50 basis points last year due to the continued build-up in inflation pressures brought about by escalating prices of oil and food in the world market.