RP banking system solid, stable despite weak 2009

CEBU, Philippines - Despite the financial challenges faced by most if not all economies in the world in 2009, the Philippines’ banking system remained strong and stable, thus strengthening the general economic landscape in the country.

“The impact of the global financial turmoil on the country’s financial system has been limited because of Philippine financial institutions remain fundamentally sound and stable,” revealed the year-ender economic report of the Bangko Sentral Ng Pilipinas (BSP).

The non-performing loans ration (NPL) of the Philippine Banking System (PBS) and universal and commercial banks stood at 4.1 percent and 3.4 percent respectively, as of end June 2009.

Moreover, banks remained capitalized at levels above the BSP regulatory requirement and the Base International Standard.

As of first semester of 2009, the capital adequacy ratios within the Philippine banking system stood at 14.6 percent and 15.3 percent on a solo and consolidated basis, respectively.

Meanwhile, in Cebu, the Cebu Bankers Club (CBC) is strengthening its monitoring program to easily spot delinquent borrowers through the Automatic Credit Information System (ACIS).

CBC former president Prudencio Gesta, he said that the organization is going to enhance the capability of the ACIS system that will add more listings of block-listed borrowers from each bank member, in order to protect the banking business from delinquent borrowers.

Although the rate of non-performing loans (NPL) in the local scene has been declining significantly, after its hit its highest during the 1997 regional economic crisis, Gesta said there is still a dire need for the banking system to strengthen its monitoring program to spot clients that have mishandled their accounts in their respective banks.

Aside from the local network of member banks, the exchange of credit monitoring is not only limited in Metro Cebu, as the ACIS system is also connected with the national information exchange through the Bankers Association of the Philippines (BAP).