PH banks seen mostly ‘resilient’ to shocks

The Philippine banking sector remains resilient to shocks as key players are well-capitalized, but smaller banks need guidance from regulators, according to Asean+3 Macroeconomic Research Office (AMRO).

The Singapore-based think tank stress-tested 17 Philippine banks using three adverse scenarios: recession, sharp interest rate hike and a combination of these two shocks.

AMRO noted that although the pandemic-induced surge in bad loans had abated with the recovering economy, it had to assess the banking sector’s resilience to economic or financial risks.

“The stress test results suggest that the credit losses of the Philippine banking sector increase across various shocks,” AMRO said.

“However, the Philippine banking sector remains resilient to shocks as the banks are well-placed to meet Bangko Sentral ng Pilipinas’ capital requirements,” it added.

AMRO added that…