We are also intensifying our coordination efforts with other financial regulators so that we can achieve a more level regulatory playing field. In July 2004, a Memorandum of Agreement was signed by the BSP, the Securities and Exchange Commission (SEC), the Insurance Commission (IC) and the Philippine Deposit Insurance Corporation (PDIC) to formally establish a Financial Sector Forum (FSF).
House prices – which were already significantly overvalued based on historical and international indicators – were accelerating rapidly in our two largest cities (that account for around half of the national market). In addition, household debt was at high levels, and banks were competing aggressively for mortgage lending to borrowers with small deposits.