Philippine banks uncertain

Philippine banks uncertain

TOKYO (AFP): Standard and Poor's Asia Ltd. said yesterday that the outlook for Philippine banks was uncertain given with the proposed entry of foreign banks and the possible weakening of credit standards as lending grows.

"Despite recent good performances and relatively solid financial profiles, the credit quality of Philippine banks is weakened by the relatively high country and economic risks associated with a developing country such as the Philippines," the agency said in its latest ASEAN Banking Profiles report.

Economic risks restrain the international credit risk standing of banks in the Philippines which was assigned a BB-minus sovereign rating for senior foreign currency obligations in June last year.

The medium-term credit outlook for commercial banks has "favorable features, such as generally solid capitalization and relatively high earnings, a satisfactory credit loss record and supportive ownership structures.

"Supporting the favorable outlook factors are a strengthening economy, greater political stability and improved business and investor confidence.