Moody’s say Philippine banks immune to global economic shocks

Philippine banks are immune to global economic shocks, one of the major international credit rating agencies said Monday.

Moody’s Investors Service said in its Asia-Pacific Banking Outlook 2013 report the Philippine banking system would continue to be resilient and would not be affected by negative events overseas.

Moodys said “with the positive outlook for the Philippines… its banking system will remain relatively immune to global shocks and continue to benefit from steady credit growth.”

Moody’s said that the broad credit outlook for banks in the Asia-Pacific region in 2013 was stable on the expectation that they would remain largely insulated from the negative credit pressures affecting their peers in many Western economies.

“We consider that this stable outlook is driven mainly by the region’s economic resilience; its relatively accommodative monetary policy; and the banks’ own strong liquidity when compared to global norms, as well as their relatively robust capital buffers,” Stephen Long, managing director for Moody’s Financial Institutions Group in Asia Pacific, said.

Moody’s examines the trends for 14 banking systems in the region, with only the Philippines exhibiting a positive outlook and 11 countries with stable outlooks. India and Vietnam had negative outlooks.

“For the region, in terms of specifics, we consider that the economic recovery from the troughs reached in mid-2012 will continue in much of the region in 2013. At the same time, interest rates will remain low, making an asset quality shock unlikely during this year in most Asian countries,” Long said.

(Story courtesy of Julito G. Rada of Manila Standard Today)