BSP Governor Rafael B. Buenaventura clarified today the news items that appeared in certain newspapers on October 8, 2001 to the effect that the BSP will be creating its own asset management company (AMC) to absorb the non-performing assets of banks.
“I would like to categorically state that the BSP has no plans of creating its own AMC as suggested in some newspapers. In the first place, it is doubtful if our charter will allow us to do so even if we wanted to. More importantly, we believe it is not appropriate for the BSP to take on that role,” Governor Buenaventura explained.
“However, it is accurate to say that the BSP fully supports the creation of asset management companies but this will have to be primarily at the initiative of private investors. Our role is principally supportive and enabling in nature. This means we are prepared to apply banking regulations with more flexibility when appropriate to facilitate the operation of private AMCs. We are also willing to do our share in explaining to Congress the importance of having in place a special AMC law that will make private AMCs created under its terms more effective as vehicles for reducing non-performing assets in bank portfolios,” Governor Buenaventura further clarified.
“Finally, I would like to emphasize that although the non-performing assets of banks have significantly increased after 1997, the situation remains manageable and well within the scope of a market-based solution. I don’t think it’s necessary to directly use public funds in an asset clean-up similar to what was done in other Asian countries. Our banking system is not in that crisis situation level. This is the reason why the establishment of a central government AMC, whether or not involving the BSP, is not appropriate for the Philippine situation,” Governor Buenaventura concluded.