Phl banks remain resilient despite rising credit risks

The Philippine banking sector remains capable of weathering potential economic shocks despite emerging risks to credit quality, the Bangko Sentral ng Pilipinas said on Friday.

The statement came after Fitch Ratings warned that recent economic headwinds could lead to higher loan impairments and weaker profitability among local banks this year.

Monetary authorities said they continue to closely monitor developments affecting banks’ asset quality, earnings, liquidity, and capital levels. They noted that lenders are still backed by strong liquidity positions, adequate capital buffers, and manageable levels of non-performing assets.

While some borrower segments may face increased pressure, regulators said there is currently no sign of a widespread deterioration in the banking system.

Banks are expected to maintain prudent lending practices, sufficient loan-loss provisions, sound governance, and strong capital and liquidity positions to help contain risks.

The central bank also assured the public that it stands ready to implement appropriate supervisory measures whenever necessary to safeguard financial stability and protect depositors.