BMI Research expects asset quality among Philippine commercial banks to stabilize and perhaps even improve over the coming quarters supported by a robust economy, healthy capitalization and liquidity profiles, and the likelihood of further consolidation. BMI Research maintained its forecast for loan growth at 17 percent in 2017 from 17.3 percent in 2016. One of the key strengths of Philippine commercial banks is high capital buffers which should safeguard financial stability in the event of moderate credit shocks and unexpected losses, according to BMI Research. It also lowers asset-liability mismatch risk arising from currency fluctuations, BMI Research noted. BMI Research believes that further consolidation should aid financial intermediation processes and allow commercial banks to expand their reach to the more remote areas of the country by acquiring their smaller rural bank counterparts.

Source: Manila Times July 12, 2017 18:00 UTC