RP banking sector stable, bad debts loom

RP banking sector stable, bad debts loom

MANILA: Weak loans growth and over US$10 billion in non- performing assets are weighing on the Philippine banking sector, credit rating agency Standard and Poor's said on Thursday.

SP said in a report the Philippine banking sector could be heading for tougher times as considerable levels of bad debts weigh heavily on asset quality.

"Although the country's economic growth remains on track, the Philippine banking system is weakly capitalized by international standards, and remains saddled with bad debts," SP credit analyst WeeKiat Sim said in the report.

The report, "Philippine Banking Industry Stable but Struggling Under Bad Debt Burden" said the banking sector remains shackled by large levels of non-performing assets (NPAs), with regulatory distressed assets of 601.5 billion pesos (US$10.7 billion) as of March 2004. --AFP