Philippine banks to see positive growth over the medium term

Thanks to strong economic growth in the country.

BMI Research analysts continue to believe that the outlook for the Philippine banking sector remains positive and there are few risks to financial stability over the medium-term. Our constructive view is informed by a strong economic growth outlook, healthy capitalisation and liquidity profiles, and ongoing positive structural reforms.

Here's more from BMI Research:

Firstly, the Philippines will remain one of the fastest growing economy in the region due to an improved business environment, positive demographics, and the government expansionary fiscal plans, which will continue to drive investment, output, and credit growth.

Secondly, the banking system's high capital adequacy ratio of 15.6% in September 2016 (latest available) and ample liquidity should provide sufficient defense against moderate credit shocks and unexpected losses.

Lastly, the government has been encouraging consolidation in the industry, which we believe will improve financial intermediation processes in the country and reduce regulatory burden.