2026 BSP Corporate Governance Summit

2026 Corporate Governance Summit 

May 25 2026

BSP Assembly Hall 

Good morning.

Thank you, Prof. Restoy.

Your core message—that strong bank governance requires effective supervision and sound culture, not just regulation—resonates deeply in the Philippine context.

Nearly a decade ago, as DG Lyn would recall I spoke at a BSP-IFC conference on corporate governance and said that governance is about nurturing a culture of integrity, fairness, accountability, and transparency—from the Board down. That still holds. What your presentation reinforces is that major banking failures, from the GFC to more recent ones, weren’t just about weak risk management. They reflected deeper failures in culture and governance. As a wise man once said “ Corporate Governance is like air; you only notice it when it’s bad”.

The Philippines has a resilient banking system, but vulnerabilities remain—concentrated ownership, conglomerate structures, relationship-driven banking. These amplify risk when governance is weak. Regulatory compliance is not the same as soundness.
That’s why the BSP has been moving from a compliance-based to a more risk-based, judgment-driven supervisory approach. 

 

Boards are central to this. As I once quoted the SEC chair (Atty Tess Herbosa, here with us today): “Companies don’t fail, boards do.” Independence and diversity matter, but what really counts is competence, engagement, and the courage to challenge management. Without that, board oversight is superficial.

On your point about the Supervisory Risk Appetite Framework—we find this compelling.
The BSP has already embedded many SRAF elements through our Supervisory Assessment Framework and graduated enforcement policies: risk-based prioritization, structured supervisory judgment, proportionate escalation. Where we can go further is integrating these into a unified SRAF with an explicit Risk Appetite Statement, along the lines of the ECB or the Bank of Canada.


I’ve seen this evolution firsthand—two decades as a bank director before becoming a regulator.
When I first joined the BPI board, the Report of Examination felt like a compliance checklist.
Not very useful for a new director trying to understand the big picture.
Over time, under Gov. Say and then DG Nesting, the BSP shifted meaningfully—anchoring supervision on stress testing, ICAAP, and forward-looking risk assessment. That shift made governance decisions more grounded and more useful.

 

It’s not coincidence that the Philippines has had no major bank failure in over two decades.
Stringent supervision works. But it’s only half the equation—banks’ own governance must keep pace.

So let me close with three simple points.

One: supervision needs to go deeper—beyond compliance to actual behavior.

Two: boards need to be genuinely competent and engaged, not just structurally independent.

Three: supervisory actions must be consistent, risk-focused, and judgment-driven.

Financial stability rests on trust. Trust depends on how institutions are actually governed—not just on paper. Our job as regulators is to make sure standards mean something. The industry’s job is to treat governance as a strategic asset, not a box to check.

Thank you.