Regulators in the Philippines
Regulatory Environment — Philippines
Balance sheet reporting
Quarterly balance sheet statistics reporting
Capital adequacy reporting
Securities transactions reporting
Foreign exchange reporting
Firms are faced with investing time, effort and resource to:
So how can we help you?
Wolters Kluwer Financial Services provides regulatory reporting solutions throughout the world for banks, insurance companies, and other financial institutions. By leveraging a global data model (DataFoundation), a standardised integral development environment, fully integrated calculation capabilities and a global runtime engine for reporting, we can provide local reporting efficiently consistently for any jurisdiction.
The main benefits of the our regulatory reporting solution include:
As leaders in the field of risk and regulatory solutions Wolters Kluwer Financial Services understands your business needs. Our heritage in and in-depth knowledge of the financial market enables the development of our solutions to be so flexible that they meet the needs of ALL firms whatever the size or complexity.
Wolters Kluwer Financial Services provides full coverage to all banks legally bound to report to the Bangko Sentral ng Pilipinas.
Asset & Liability Management (ALM)
ALM is being embraced as more than just a tool to monitor and manage interest rate risk in the banking book. It is a process for managing balance sheets against other risks that affect earnings and portfolio valuations of banks, shifts in customer behavior, future balance sheet growth, and impact of business strategies (pricing, hedging, growth, and planning).
In light of the financial crisis, firms of all shapes and sizes are re-evaluating their ALM model. In order to earn an adequate return, the need to assess and mitigate the adverse value and income impact of changes in the market has become even more vital.
So how do different types of financial institutions manage their ALM requirements today?
Large, tier one firms typically develop their ALM systems in-house, a luxury few smaller firms can’t afford. These systems typically include sophisticated and finely tuned functionality for value exposure, value-at-risk, dynamic simulation, earnings-at-risk, and treasury view.
In the past, smaller firms have found solutions for meeting ALM requirements to be over-complicated, difficult to integrate with incumbent systems, resource-dependent and cost-prohibitive. For these reasons they have resorted to using alternative methods such as spreadsheets or independent consultants, neither of which is ideal.
Until now the sheer cost of developing and supporting an in-house ALM system has been restrictive to smaller firms but the need to have accurate visibility into the future position of the firm is critical.
Our heritage and in-depth knowledge of the market have enabled the configuration of our solution to be so flexible that it meets the needs of ALL firms; from those with highly complex derivatives to those with a vanilla approach.
Our ALM solution provides a comprehensive range of capabilities covering the following areas:
And for the smaller firm
Our rich ALM solution offers functionality that delivers immediate return on investment by taking a ‘compact’ approach with risk management features that absorb complexity. Along with evaluating a mismatch between assets and liabilities, our ALM solution also manages risks arising due to liquidity and interest rate in banking books.
With our ALM solution firms can:
The 6-step process for ALM
Bangko Sentral ng Philipinas (BSP) revised its risk-based capital adequacy framework as per the international standards set by Basel II. The minimum capital requirements and disclosure requirements under Pillar 1 and 3 came into effect from July 1, 2007. To set the guidelines on bank’s Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review Process, the BSP issued a circular on January 15, 2009 effective as of January 1, 2011. The guidelines set by the BSP are applicable to all universal and commercial banks (u/KBs) and their subsidiaries and quasi-banks on both solo and consolidated basis.
A pilot run for the revised risk -based capital adequacy framework for stand-alone thrift banks, rural banks and co-operative banks came into effect from January 1, 2012.
Our solution provides a sophisticated Basel II module with the ability to calculate the capital charge for credit risk, market risk and operational risk. It can be used as an independent standalone solution or in combination with our other reporting and risk management solutions assisting banks to meet regulatory requirements and improve their performance over risk.
Philippines Financial Reporting Standards (PFRS) 9 is a local application of International Financial Reporting Standards (IFRS) 9.
The implementation of PFRS is scheduled in 3 phases – the first phase the modifications projected by the International Accounting Standard Board (IASB) to replace the International Accounting Standards (IAS) 39 Financial Instruments: Recognition and Measurement. Phase 2 and 3 deals with the amortization cost and impairment of financial assets and hedge accounting.
Implementation of PFRS 9 Is mandatory from January 1, 2013 and entities are permitted to adopt the standards on or after January 1, 2010.
The aim of PFRS 9 is to improve and simplify the classification and measurement of financial instruments. It classifies and subsequently measures financial assets at either amortized cost or fair value on the basis of
The PFRS 9 helps the users to understand the risks and the likely cash flows from the financial assets.
The banks/financial institutions who are planning a early adoption of the set standards need to follow the below prudential rules
Our IFRS solution enables classification of financial instruments and calculation of valuations using appropriate fair values or amortised costs. It also supports several methods for testing and estimating impairment as required by IAS 39. .
Read more about the IFRS solution here.
Liquidity Risk Management
Banks are interested in going beyond simple static financial ratios and gap reports as the measures of their liquidity risk. Since the Basel Committee on Banking Supervision issued its final paper on ‘Principles for Sound Liquidity Risk Management and Supervision’ banks have been adopting liquidity stress testing scenarios to simulate bank-specific and system risks to their balance sheet. By modelling their liquidity contingency plans against such scenarios, a measure of the bank’s cash-flow survival horizon can be derived, giving a statement of the effectiveness of the bank’s plan against such crisis.