BMI KEEPS POSITIVE VIEW ON PH BANKS

Fitch Group unit sees 15% loan growth until 2019

THE dynamics of Philippine banks remain healthy according to BMI Research, prompting the Fitch Group unit to keep a positive outlook on the industry.

Bank lending could grow by 15 percent every year until 2019, BMI said, as the Philippine economy was likely to maintain its robust growth.

Gross domestic product (GDP) growth is expected to hit 6.2 percent per year, thanks to strong demographic trends that will sup- port savings, increased productivity because of continued business and tax reforms, and strong government initiatives to invest in infrastructure.

The Philippine economy grew by 6.5 percent in the second quarter, picking up from the 6.4 percent of the year but down from 7.1 a year earlier.

Year to date growth, at 6.4 percent, remains below the official 2017 goal of 6.5 percent and 7.5 percent. For 2018 until 2022, the target is 7 percent to 8 percent.

“Deepening economic cooperation with China and Japan due to

- matic foreign policy will also provide a tailwind for investment and trade,” the Fitch unit added.

Despite rapid loan growth, meanwhile, gross non-performing loan (NPL) ratios among Philippine banks have been on a broad downtrend since 2013 and appear to have stabilized at around 2 percent. footing, we expect this to be supportive of corporate profitability which will in turn have a positive

- ability of banks over the coming quarters,” BMI said.

Philippine banks are also generally well-funded with the overall capital adequacy ratio standing at 15.5 percent as of end-June, above the regulatory requirement of 10