The robust economy will support Philippine banks’ asset quality and earnings over the next two years, Fitch Ratings said in a new report.
The standalone credit profiles of the large privately owned Philippine banks—BDO Unibank Inc., Bank of the Philippine Islands and Metropolitan Bank & Trust Company—continue to outperform their state-owned peers, helped by the banks’ steadier underwriting standards and entrenched business profiles. Fitch said the Philippine banking sector’s profitability hit a 10-year high in 2023, driven by wider margins. System asset quality also held up well despite the sharp rise in interest rates, as indicated by the system non-performing loan ratio of 3.5 percent as of January 2024, helped by the supportive economic environment.