MANILA, Philippines — The Department of Finance (DOF) has expressed confidence there will be no significant impact on the stability of five banks due to their P21 billion loan exposure to Hanjin Heavy Industries and Construction Philippines (HHIC) after the shipbuilder filed for corporate rehabilitation last week. The finance chief has not indicated yet if the government would help in attracting new investors for Hanjin, but said banks, which include state-run Land Bank of the Philippines, have agreed to work together to recover their loan exposure. The country’s largest banks BDO Unibank, Metropolitan Bank & Trust Co., LandBank, Bank of the Philippine Islands, and RCBC have a combined exposure of more than P21 billion in HHIC. For his part, Landbank president and chief executive officer Alex Buenaventura has expressed confidence that the bank can cover its $85 million loan exposure to HHIC, given that the assets weigh higher than the liabilities. Furthermore, Guinigundo said Philippines banks are well capitalized with a capital adequacy ratio (CAR) of between 15 and 16 percent, while their non-performing loan (NPL) ratios remain below two percent.

Source: Philippine Star January 13, 2019 21:00 UTC