Philippine banking system prepared amid volatility - Tetangco

The Philippine banking system is prepared to manage evolving risks amid volatility expected this year, Bangko Sentral ng Pilipinas Governor Amando Tetangco, Jr. said on Tuesday.

"Thus, while 2016 will test the resilience of our banking, we can rely on the quality of our preparations to manage evolving risks from volatility as market tide shifts," Tetangco told the banking community during an annual gathering in Manila.

He said that given the country's current conditions, its sources of resilience — private consumption and government spending — will sustain growth momentum.

"Private consumption continues to be buoyant while the services and industry outputs remain firm. And government spending is expected to further increase in line with continuing efforts to address issues on spending bottlenecks, especially for public infrastructure," he added.

The administration last year said it plans to increase infrastructure spending to almost P800 billion this year. "We invested P175 billion in 2011 for various infrastructure investments. This is going up to close to P800 billion in 2016," Public Works Secretary Rogelio Singson said in a speech.

The positive outlook for the country's banking sector is also shared by external analysts, Tetangco noted, with the Philippine banking system gaining a positive rating outlook from Fitch Ratings this year, the only one for Asia-Pacific.

"Among others, Fitch noted the 'generally healthy profile of local lenders, sound operating environment, and the Philippines' strong economic fundamentals,'" Tetangco said.

Fitch on December revised its outlook on the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP).

"Philippine banks' generally-high capitalization, healthy funding and liquidity, and satisfactory loan-loss reserves help to balance the risks from relatively high credit growth over the past few years," Fitch said in an accompanying statement to its "2016 Outlook: Asia-Pacific Banks." — BAP, GMA News