IMF team leader Joshua Felman said they want banks to improve their balance sheets "which have become increasingly burdened by their non-performing assets (NPAs)."
Felman added they want monetary authorities to press Philippine banks "to add more equity to their coffers, to initiate more mergers, and entertain more buyers."
An IMF team is in town to review the economic performance of the country. The team arrived May 30 and held post-program consultations with government monetary and economic managers.
The IMF members expressed concern over the continued interference of Philippine courts in issues affecting the country’s banking system, and the continued delay in the passage of the SPAV bill.
The SPAV bill has been passed by the House of Representatives but the Senate adjourned without passing the measure. The next regular session of Congress opens in July and it is only then when the Senate will deliberate on the SPAV bill.
Without the SPAV law, banks will not be able to wipe out their huge non-performing loans (NPLs), which has risen to over 18-percent on an industry-wide basis.
The IMF team earlier urged the National Government to reorganize the Bureau of Internal Revenue (BIR) as part of its drive to increase revenue collections.
"The Philippine government should order the BIR to start administrative actions such as auditing and prosecuting tax evaders, strengthening internal controls as well as eliminate graft and corruption," Felman said.
Earlier, the IMF expressed deep concern over the ability of the government to meet its budget deficit target of P130 billion.
For the first four months of the year, the National Government’s budget shortfall hit P82.96 billion, breaching its P78.26 billion target ceiling for the first half by P4.7 billion.