Fitch revises Philippine banking system outlook to 'stable'

Global credit watcher Fitch Ratings has revised its outlook on the Philippine banking system to “stable” from “negative.”

In its latest review, Fitch Ratings cited the projected uptrend of the Philippine economy, with growth expected to average 6.0% this year after the 8.3% percent in the first quarter.

“We revised the outlook on the banking system operating environment score to stable, from negative, on receding COVID-19 pandemic related risks and the continued economic recovery,” it said in a commentary.

However, Fitch flagged downside risks such as the rising commodity prices which are likely to fan inflation and hit consumer sentiment in the near term.

“Prolonged inflationary pressures could detail the recovery momentum and hurt loan demand and our asset-quality outlook, however, this is not out base case,” it said.

In February, Fitch retained its negative credit outlook on the Philippines, citing uncertainties in the economic recovery amid the COVID-19 crisis, and the May 2022 elections. —LBG, GMA News