Latest Stories

S&P: Philippine banks may continue to ride high

Standard & Poor’s said the Philippine banking sector may continue to enjoy the perks that accompany a growing economy and is expected to remain resilient, fending off external shocks.

In its latest report on the Philippines, S&P said bank loans would continue to grow by a double-digit pace in 2013 due to rising resources and banks’ low exposure to bad debts.

S&P projects bank loans in the country to grow by 10.1 percent this year from the estimated 10.7 percent last year.

The credit watchdog said significant increase in credit could have increased banks’ exposure to default risks, but added that such risks are not material at the moment.

“The Philippines’ healthy pace of economic growth has benefited the country’s banking sector. A buoyant GDP has fueled the growth in bank loans and led to improvements in asset quality,” S&P said in a report titled “Philippine Banking Outlook 2013: A Buoyant Economy Spurs Financial Strengthening.”

“Downside rating pressure [may] arise if a sharp and prolonged economic slowdown leads to an increase in borrower defaults and credit costs. Nevertheless, this is unlikely in our base case,” S&P added.

The credit rating firm said it is keeping its “stable” outlook on the Philippine banking sector, which means that there are no pressing factors that can warrant either an upgrade or downgrade in the credit rating of banks.

On one hand, S&P said, the Philippine banking sector is unlikely to suffer from dampened earnings due to the challenging global economic environment. It said brisk business activities domestically would help counter the impact of a weak external environment.

On the other hand, it added, the same external challenge could make it difficult for banks to post a significantly faster growth in profitability. Therefore, S&P said, a “stable” outlook is appropriate.

Also, S&P said the implementation in the Philippines of stricter capitalizations requirements for banks—as laid out under Basel 3—will not be a problem for industry members.

By 2014, the Bangko Sentral ng Pilipinas will impose a capital buffer requirement of 2.5 percent, which will be on top of the current 10 percent capital adequacy ratio (CAR) requirement. Moreover, banks will be required to have more than half of their CAR to be composed of high-quality capital, or Tier-1, that includes retained earnings and equity shares.—Michelle V. Remo

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Banking , banks , forecasts , Philippines , Standard & Poor's

  • alex ca

    Pabayaan lang yang China na bili ng bili ng gold kasi nasa Amerika pa rin ang control niya kita mo pag nagkataon yung may pinakamalaking reserve ng gold sa Amerika ang mismong magpababa ng halaga. Ek! Ek! ng mga intsik na yan iiyak yan sa lugi…kaya ng Amerika ibaba ang presyo ng ginto….

  • felix1959

    China is dumping their dollars by buying hundreds of tons of gold. Why? they are beginning to get worried with the imminent collapse of the petrodollars, US economy based on Ponzi scheme has reached its saturation and soon will collapse. Countries are now trading with oil suppliers directly in their own currencies. America just delayed the  demise of the dollars by attacking Iraq, Saddam Hussein planned to sell oil dealing in the euro currency therefore by-passing the dollars which is very bad for the US, hence the attack.

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • 2 killed in apparent Bahrain car bombing
  • SC suspends proctor in 2011 bar exams
  • At barricades, Ukraine insurgents await Easter
  • Solons seek ample protection for bank depositors
  • Tragedies at sea: The Sewol and the Costa Concordia
  • Sports

  • Tottenham beats Fulham 3-1 in Premier League
  • Martino defends Messi, takes blame for Barca fail
  • Vettel hoping for resurgence at Chinese GP
  • MLB pitcher donates $100,000 for Sewol ferry victims
  • Hamilton takes pole at Chinese Grand Prix
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • Myx TV premieres Asian American ‘docu-series’
  • A nutty finale for ‘Scandal,’ TV’s craziest show
  • EXO postpones release of mini album ‘Overdose’
  • ‘X-men’ filmmaker slams ‘fabricated’ sex attack claims
  • Singer Chris Brown’s bodyguard on trial in DC
  • Business

  • Fiat-Chrysler to produce iconic Jeep in China from 2015
  • US commerce secretary spells out economic facet of ‘pivot to Asia’
  • Italy sells luxury state cars on eBay
  • Asian shares mostly up in quiet trade
  • Dollar up in Asia on US jobs data, Ukraine deal
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • Cesar Chavez movie sparks memories of Fil-Am labor leaders
  • Filipinos in US poised for success
  • Visas for priests and other faith leaders
  • DOH to continue tracking co-passengers of OFW infected with MERS virus
  • 5 Filipinos with MERS in UAE reported in stable condition
  • Marketplace