IMF wants mergers, too

The International Monetary Fund (IMF) wants more mergers in the country’s banking system.

IMF team leader Joshua Felman added that they want banks to improve their balance sheets "which have become increasingly burdened by their non-performing assets (NPAs)."

Felman added that they want monetary authorities to press Philippine banks "to add more equity to their coffers, to initiate more mergers, and entertain more buyers."

The IMF sent an investigation team to the Philippines to look at the financial health of the country. They arrived May 30 and held post-program consultations with government monetary and economic managers.

Meanwhile, the team expressed concern over the continued interference of the Philippine courts in issues affecting the country’s banking system, and the continued delay in the passage of the SPAV bill.

The SPAV bill has been languishing in the cabinets of Congress since the Senate and later the House of Representatives were each split. Regular session has since been suspended until the next regular session, which starts in July.

Without the SPAV law, banks would not be able to eliminate the huge non-performing loans (NPLs) of the banking system, which has increased to over 18 percent.

The only reprieve is the sell the bad debts and assets to a foreign asset management company (AMC) which specialize in buying, rehabilitation and selling these assets. However, the AMCs decided to wait for the SPAV law designed to outline the "rules of the game." – TPT