MANILA, Philippines—Rizal Commercial Banking Corp. is allocating P980 million for its investments in Philippine bonds that have exposure to embattled American investment bank Lehman Brothers.

RCBC executive vice-president Elbert Zosa said the bank's provisions would come from its reserves and would ensure there are funds for any write-down from the Lehman exposure.

“This will have no adverse effect on RCBC's capital base which is at P27.4 billion,” Zosa said.

The bank has a capital adequacy ratio or capital against risky assets of 20.97 percent as of June 30, well above the 10 percent cap of the Bangko Sentral ng Pilipinas. The bank is also looking at a net income of between P2.5 to P2.8 billion this year.

Three other major banks--Bank of the Philippine Islands, China Banking Corp. and Union Bank of the Philippines say they are in no danger from the financial troubles of Lehman and Bank of America's buyout of brokerage Merrill Lynch.

However, two of the country’s biggest lenders, Banco de Oro and Metropolitan Bank & Trust Co., also have exposure to Lehman but have set aside almost $95 million in provisions.

The Bangko Sentral ng Pilipinas, the Philippine central bank, said Tuesday that it was ready to provide cash to banks that might need funds in the aftermath of Lehman’s collapse, even as it assured that overall exposure of the banking sector
is only 0.3-0.4 percent of total assets.