In the advent of increased cross-border transactions and heightened interconnectedness of economies, however, this very same financial system which enables economic growth could also be the channel for transmitting vulnerabilities. Financial systems have become a way by which contagion is amplified. Indeed, this feedback loop relationship has never been more evident than during the Global Financial Crisis and its aftermath.
As we all know, the Philippine economy survived the GFC relatively unscathed. That, in large part, was due to our sound and stable financial system. Seven years since the GFC, the Philippine banking system continues to stand strong. And, since 2012, the Philippines has been the only jurisdiction whose banking system has been given a positive rating outlook by Moody’s Investor Ratings Services.