The Philippine banking system is likely to benefit from a brighter outlook for the economy, S&P Global Ratings said, with stronger domestic activity to fuel increased lending for local players.
“Our view on the Philippines banking system is pretty much aligned with our view on the government as well. We are equally optimistic on the Philippines banking system as a whole,” S&P credit analyst Ivan Tan said in a webcast last week.
“We are seeing this positivity feeds through to the conglomerates and the corporate sector, and banks in the Philippines typically lend to the large corporates and medium-sized SMEs as well. Basically the banking sector is a face or representation of the economy there and when the economy does well, the credit profile of the banking system will improve as well.”
On April 26, S&P revised upward its rating outlook for the Philippines to “positive,” hinting at a possible credit upgrade in the coming months. — Melissa Luz T. Lopez