ASEAN KEY DESTINATIONS
PHL banking sector to continue growing medium-term
The Philippine banking sector is expected to continue growing in the medium-term given the strong economic growth outlook of the country, BMI Research said in its report.
"We continue to believe the outlook for the Philippines banking sector remains positive and there are few risks to financial stability over the medium-term," BMI, a Fitch company, said in its Asia Monitor: South East Asia Volume 2 Report.
"Our constructive view is informed by a strong economic growth outlook, healthy capitalization and liquidity profiles," the report read.
The Philippine economy grew by 6.4 percent in the first quarter of the year, compared with 6.8 percent a year earlier and with 6.6 percent in the fourth quarter of 2016.
Socioeconomic Planning Secretary Ernesto M. Pernia and Finance Secretary Carlos G. Dominguez III earlier noted the country is on track to meet its full-year economic growth target of 6.5 to 7.5 percent this year.
"Firstly, the Philippines will remain one of the fastest growing economies in the region due to an improved business environment, positive demographics and government expansionary fiscal plans, which will continue to drive investment, output and credit growth," BMI said.
"Secondly, the banking system's high capital adequacy ratio of 15.6 percent in September 2016 (latest available) and ample liquidity should provide sufficient defense against moderate credit shocks and unexpected losses," it said.
BMI noted the government has been encouraging consolidation in the banking industry, which will improve financial intermediation processes and reduce regulatory burden. — Jon Viktor Cabuenas/VDS, GMA News
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