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Recent Philippine Banking Sector Developments

Recent Philippine Banking Sector Developments. 26 May 2005. Banking system remains resilient. Resources of the Banking System in trillion pesos. Banks’ aggregate resources higher in February 2005. Feb. Banking system remains resilient. KB’s: Capital Adequacy Ratio in percent. 17.76.

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Recent Philippine Banking Sector Developments

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  1. Recent Philippine Banking SectorDevelopments 26 May 2005

  2. Banking system remains resilient Resources of the Banking Systemin trillion pesos • Banks’ aggregate resources higher in February 2005 Feb

  3. Banking system remains resilient KB’s: Capital Adequacy Ratio in percent 17.76 • KB’s capital adequacy ratio remained comfortable as of June 2004 BIS: 8% Statutory floor: 10% 2003 2002 2004

  4. Banking system remains resilient Banking System: NPL / Total Loans in percent • NPL ratio declines to 12.1% as of February 2005 12.1 2004 2005

  5. Bank lending grows steadily Total Loans Outstanding of Commercial Banks Annual Growth Rate (%) • KB loans up 5.8 percent in February 2005 5.8 2001 2002 2003 2004 2005

  6. Recent Banking Sector Reforms • Microfinance Program • BSP sustains support to microfinance program • BSP provides microfinance access to a broad range of financial services such as deposits, loans, payment services, money transfers and insurance

  7. Recent Banking Sector Reforms • BSP initiatives to promote microfinance: • issued guidelines on microfinance loans • partially lifted moratorium on branch licensing for banks engaged in microfinance • issued guidelines for setting up branches of microfinance-oriented banks and branches of banks • opened rediscount facility for microfinance loans

  8. Recent Banking Sector Reforms • Anti-Money Laundering Initiatives • Anti-Money Laundering Act of 2001 • Salient features: • Defines and criminalizes money laundering • Introduces mandatory reporting system of suspicious transactions • Requires customer identification • Creation of Anti-Money Laundering Council

  9. Recent Banking Sector Reforms • Special Purpose Vehicle Act of 2002 • Rationale: address NPAs • Provides framework for sale of NPAs of banks and financial institutions • Follows a market-based, private sector driven model • Private sector: set-up SPVs • Government: provide incentives

  10. SPV Update: (as of May 2005) • 195 COEs have been issued • P56.508 billion NPAs transferred • Several banks have pending applications for COE for the bulk sale of NPAs to SPVs • Banks have until 8 April 2005 to sell their NPAs to SPV • A bill has been filed in Congress to extend the effectivity of the privileges under the SPV Law.

  11. Thank you…

  12. Web: www.bsp.gov.phE-mail: bspmail@bsp.gov.ph

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