Philippine banks face pressure to intensify efforts promoting foreign exchange hedging as geopolitical risks escalate, according to a central banker. The conflict in Iran has highlighted the country's vulnerability to external shocks, prompting calls for stronger corporate risk management practices.

The central bank official emphasized that companies remain under-hedged against currency fluctuations despite growing regional instability. Philippine banks have traditionally been cautious in pushing hedging products, often leaving businesses exposed to peso volatility.

With the peso experiencing increased volatility and geopolitical tensions mounting, the central bank is pushing financial institutions to take a more proactive role in protecting corporate balance sheets. This shift comes as the Philippines seeks to strengthen its financial resilience against external economic shocks.