Heavy rains shut down Philippine financial markets
An inclement weather that flooded most of Metro Manila and most of Luzon reminiscent of the wrath of Ondoy (international name: Ketsana) in 2009 halted Philippine financial markets and banking operations yesterday.
The Philippine Stock Exchange announced before 6am yesterday the suspension of stocks trading. This was followed by an advisory from the Bankers Association of the Philippines and the Central Bank of the Philippines (Bangko Sentral ng Pilipinas or BSP) that there would be no trading at the spot foreign exchange floor of the Philippine Dealing System and the fixed income bourse Philippine Dealing and Exchange Corp.
“We are suspending trading since the PhilPASS [Philippine Payments and Settlements System] of the BSP [Bangko Sentral ng Pilipinas] is not clearing,” PSE president Hans Sicat said.
PhilPASS is the system name where both processing and final settlement of fund transfer instructions can take continuously in real time. The settlement process is based on real-time transfer of central bank money.
With the suspension of work at Philippine Clearing House Corp., the PSE said it was likewise unable to operate its Securities Clearing Corporation of the Philippines, the clearing and settlement agency for all trades executed in the exchange.
Early in the morning, the influential Bankers Association of the Philippines had also recommended office suspension among banks, citing the safety of bank personnel and customers following the inclement weather. But the BAP said it would ultimately be up to each bank’s decision.
In an interview Tuesday morning, BAP president Alberto Villarosa, who is also president of Security Bank, said the association had recommended in a bulletin that member banks “consider suspending work in NCR [National Capital Region] and affected areas.”
“At the BAP, we realised that we have an obligation to serve the public so we can’t tell everybody unilaterally to shut down but also we are concerned about the safety of bank staff and personnel, so we leave it to the discretion of member banks,” Villarosa said.
The work suspension would only be in the NCR and flooded areas in Luzon, Villarosa said.
“We’d rather be safe than sorry,” he said.
As of 8:30am, Villarosa said the following banks had made an early decision to suspend work: HSBC, Banco de Oro Unibank, Asia United Bank, Security Bank, and Philippine Savings Bank.
A Citibank spokesperson said clients were advised to instead conduct their banking transactions online or through the phone banking facilities.
East West Bank president Antonio Moncupa initially said there would be no blanket suspension as a skeletal force would be kept in key areas, but because Malacañang had announced the suspension of work, he would ask the few remaining people in the office to go home.
Bank of the Philippine Islands and Metropolitan Bank and Trust Co. had said they would remain open for business. But after the Palace's suspension order, BPI decided to hold banking operations only until 1pm.
BPI said early on that employees living in flooded areas were advised not to report for work if they felt it unsafe to leave their homes but that it would keep a skeletal force in its Metro Manila branches.
BDO said in its advisory: “Due to flooding and inclement weather, greater Metro Manila branches including Pampanga, Tarlac, Pangasinan and some parts of Bulacan shall be closed. All other branches shall be open for business as usual.”
“BDO ATMs, meanwhile, are up except in selected areas heavily affected by floods. The bank will constantly monitor to assure continuous availability of ATMs,” the bank said.
PSBank said all branches in the National Capital Region and provinces were open except those affected by heavy flood. The bank said its ATMs were working except those in areas without electricity.