ANGARA URGES SENATE TO PASS FINANCIAL REFORMS

Amidst threats of global economic slowdown Senator Edgardo J. Angara said that instituting financial reforms would improve and strengthen our financial system and shield the country from external shocks.

"The banking reforms of the past years are paying off, making the Philippine financial market capable of absorbing shocks. Governor Tetangco of the Bangko Sentral ng Pilipinas (BSP) gave assurance that for now, the Philippine banking system remains stable and this is because of the reforms we have instituted before," said Angara who chairs the Senate Committee on Finance.

He added, "Our financial system, however, is not absolutely shock-proof from the repercussions of the global credit crisis. Thus, more structural reforms need to be established to ensure our financial system remains resilient, and among them are: amendments to the BSP's supervisory activities, the Corporate Recovery Act, and the Collective Investment Schemes Law, which are all in plenary in the Senate."

The financial crisis has its roots on subprime mortgages. Lending on easy initial terms and rising housing prices encouraged borrowers in the belief they would be able to quickly refinance at more favorable terms. When interest rose, the economy faltered and home values plummeted, foreclosure quickly ensued and accelerated. Thus, triggering the financial turbulence.

"Now is the time to fast track all financial reforms. Crisis such as this scale have underscored the immediate impacts of reforms we are trying to undertake. And through continued financial reforms, the Philippines will be in a better position to face global financial turbulence," said Angara.