Philippine banks likely to weather crisis better than SE Asian peers, says S&P

By Beatrice M. Laforga, Reporter

PHILIPPINE BANKS appear better positioned to weather the surge in soured loans than Southeast Asian peers, but sluggish economic growth could dampen the sector’s recovery this year,   S&P Global Ratings said.

“We have a negative outlook on the Philippine banking sector, that means there is a one-third chance that the rating can be downgraded in 1.5 to two years, so clearly that there are risks,” Ivan Tan, director at the financial institutions ratings of S&P, told a webinar on Wednesday.

The credit rater gave a “negative” outlook on the Philippines’ rated banks on expectations that existing financial buffers may not be enough to absorb the fast deterioration of asset quality, if economic recovery is delayed.

“But if you look at it in a relative perspective in terms of the other Southeast…