S&P Global Ratings warned of slower credit growth and more bad loans for Philippine banks this year on account of coronavirus disease 2019 (Covid-19) outbreak’s impact to the economy and financial markets. In a statement released on Monday, S&P Global Ratings credit analyst Nikita Anand noted the credit rater expects “trade and private investments to slow in Philippines due to the global coronavirus outbreak, and this will drag on banks’ lending business.”S&P Global Ratings is now projecting credit growth 8 to 10 percent in 2020, down from its previous forecast of 10 to 12 percent. Last year, retail loans were a key growth driver, expanding 16 percent year-on-year. “The banking sector’s exposure to hotels and catering is about 2 percent while wholesale and retail trade is 12 percent. Nevertheless, S&P Global Ratings believes banks will be resilient to these external pressures supported by strong fundamentals.

Source: Manila Times March 09, 2020 17:03 UTC