Phl banks resilient amid Euro crisis - IMF
MANILA, Philippines - Multilateral lender International Monetary Fund (IMF) said it believes that banks operating in the Philippines would remain resilient amid the sovereign debt crisis that continue to plague European countries.
IMF mission chief Vivek Arora said in an interview with reporters that the country’s banking system would remain strong on the back of the industry’s high capitalization.
“Banking sector indicators remain quite strong. In terms of capitalization it is high,” Arora stressed.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that the capital adequacy ratios (CARs) of the banking system remained healthy at 16.48 percent on a solo basis and 17.39 percent on a consolidated basis as of end-March this year, from the revised end-December level of 15.99 percent and 16.93 percent, respectively, despite the tensions in the Middle East and North African (MENA) states as well as the debt crisis in the eurozone.
The system-wide risk-based measure of solvency remained above the central bank’s 10-percent minimum requirement and the international benchmark ratio of eight percent under the Basel Accord.
The CAR is a ratio of a bank’s capital to its risk and the central bank tracks this indicator to ensure that banks have the capability to absorb a reasonable amount of loss and that they are complying with their statutory capital requirements.
Data released by the BSP showed the CAR of universal and commercial banks improved to 16.42 percent as of end-March from 16.23 percent as of end-December on a solo basis and to 17.42 percent from 17.27 percent on a consolidated basis, while that of thrift banks improved to 16.11 percent from 12.62 percent on solo and consolidated bases.
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