By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) is currently conducting its fourth Corporate Financial Trends Survey (CFTS) to closely monitor the corporate sector’s borrowings and their capacity to pay for existing loans.
The CFTS is basically a corporate income monitoring survey to help the BSP review the private sector’s capacity to pay debts – among other financial issues – and to also assess the magnitude and extent of the pandemic’s impact on the corporate sector.
In a statement Tuesday, July 16, the BSP announced it will be conducting the latest CFTS in the third quarter this year and reassures corporates that collected survey results will not be made available to “any person or entity outside the BSP” and “will be used solely for research and policy formulation purposes.”
“As with all BSP-released statistics, the survey results will be published only in aggregate form to safeguard potentially sensitive corporate information shared by respondents,” said the BSP.
The CFTS is an annual survey conducted during the third quarter of each year. As explained by the BSP, the CFTS is a central bank initiative designed to provide a better understanding of the financial conditions of non-financial corporations (NFCs).
“It will gather granular data on firm-level borrowing activity; profitability; liquidity and solvency conditions; and funding structure and usage,” it said.
Meanwhile, the BSP said the CFTS analysis will aid the BSP in assessing the health of the corporate sector and this will “guide the BSP in promoting financial stability towards a sustainable Philippine economy.”
CFTS will also improve BSP’s understanding of industries’ financial trends and conditions such as corporates’ sources of funds, spending activities, and profitability.
Granular data is another way of gathering macrofinancial surveillance for a more appropriate monetary policy and to determine what affects corporates’ borrowing behavior, investments and production activities.
The CFTS will conduct a more intensified surveillance to enhance its monitoring of corporate financial conditions in a more comprehensive and timely manner.