The Bangko Sentral ng Pilipinas (BSP) met with local financial institutions on June 25, 2026, to discuss a key safety measure designed to keep the country’s banking system stable during tough economic times.
The briefing focused on the Countercyclical Capital Buffer (CCyB) framework. Under these rules, banks keep a financial cushion equal to 1.5 percent of their risk-weighted assets. This cushion is called a “Positive Neutral CCyB” because banks build it up during normal, everyday economic conditions so they have a reliable backup to draw from if a crisis hits.
Importantly, the framework does not force banks to go out and raise new money. Instead, they simply set aside a portion of the high-quality capital they already own, known as Common Equity Tier 1 capital. This policy is part of Basel III, a set of global banking reforms established by international regulators following the 2008 global financial crisis.
BSP assistant governor Veronica B. Bayangos explained that the framework is all about protection, noting that it helps ensure banks remain strong enough to keep lending to households and businesses even during periods of intense economic or financial stress.
Organized by the BSP’s Office of Systemic Risk Management, the meeting walked bank representatives through how the policy works, its timeline, and how it fits alongside existing banking regulations. The BSP also announced that it will review and assess these capital buffers every quarter. The session is part of the central bank’s ongoing efforts to work closely with local banks, helping them implement the new rules and reinforce the entire financial system against future risks.
