The Bangko Sentral ng Pilipinas (BSP) sees no evidence of large-scale capital flight stemming from an ongoing investigation into the controversial flood control project, suggesting that broader financial stability remains intact despite the political scandal.

BSP Governor Eli Remolona Jr. said in a recent interview with One News that the local banking system has shown no signs of systemic fund outflows

He noted that while the regulator is monitoring the situation closely through a dedicated systemic risk team, the country’s financial foundations appear insulated from the controversy.

“We see nothing systemic so far. We are monitoring the situation very closely. We have a team focused on systemic risk and closely tracking developments in the banking sector,” Remolona said.

“So far, conditions remain stable. Banks are healthy, well-capitalized, and highly liquid. Our foreign exchange (forex) reserves are ample. So, on the systemic risk side, we’re in good shape,” the governor said.

Meanwhile, big bank lending growth fell to a nearly two-year low in December 2025, dragged down by a deeper contraction in foreign loans and slower growth in resident lending. Data show it slowed to 9.2 percent in December from 10.3 percent in November, the slowest since the 8.6 percent recorded in February 2024.

Domestic liquidity, or the amount of money in the economy as measured by M3, expanded by seven percent in December, breaching the ₱20-trillion mark. However, this growth rate was slower than the 7.6-percent increase recorded in November.

Meanwhile, the local banking sector’s full-year earnings for 2025 broke another record as they hit a fresh high of ₱403.1 billion, surpassing the previous record of ₱391.3 billion in 2024. This robust net income growth was driven by higher interest and non-interest income.

While systemic capital flight does not appear to be a concern for the banking sector, Remolona said cyberthreats are plaguing the system, creating friction for the digital shift.

Remolona said local banks are moving toward highly digitalized payment processes, but risks are emerging along the way. This could derail the goal of having 70 percent of payments done digitally by 2028, as outlined in the Philippine Development Plan (PDP).

“We worry a lot about cyber risks. Even as we continue to encourage digitalization, we are also pushing banks to ensure they are defending themselves against cyber threats,” Remolona said.

He admitted that the pace of digital payments growth has been sluggish, requiring a few more years than earlier assumed to meet the 2028 goal.

“To be honest, digitalization has been slow. We are on track, but it may take a couple more years than initially expected to reach where we want to be,” Remolona said.

As of 2024, digital payments accounted for 57.4 percent of total retail transactions in the country, up from 52.8 percent in 2023 and surpassing the government’s maximum target of 54 percent.