Recent Philippine
Banking Sector
Developments
26 May 2005
Banking system remains resilient
• Banks’ aggregate
resources higher
in February 2005
Resources of the Banking System
in trillion pesos
5.0
4.5
4.2
4.0
3.3 3.4
3.5
2.8 2.8
3.0
2.5
3.6
4.3
3.8
3.0
2.1
2.0
1.6
1.5
1.0 0.6 0.7 0.8
0.5
1.0
1.3
0.0
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05
Feb
2
Banking system remains resilient
KB’s: Capital Adequacy Ratio
in percent
• KB’s capital
adequacy ratio
remained
comfortable as
of June 2004
19
17.76
18
17
16
15
14
13
BIS: 8%
Statutory floor: 10%
12
J
M
2002
M
J
S
N
J
M
2003
M
J
S
N
J
M
S
2004
J
3
Banking system remains resilient
Banking System: NPL / Total Loans
in percent
18
• NPL ratio
declines to
12.1% as of
February
2005
16
14
12
12.1
10
8
6
4
2
0
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 ‘03
J
F
2004
M
A
M
J
J
A
S
O
N
D
J
F
2005
4
Bank lending grows steadily
Total Loans Outstanding of Commercial Banks
Annual Growth Rate (%)
• KB loans up
5.8 percent
in February
2005
10.0
8.0
5.8
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
98
J
A
2001
J
O
J
A
2002
J
O
J
A
2003
J
O
J
A
2004
J
O
J
2005
5
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
6
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
7
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
8
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
9
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.
10
Thank you…
11
Web:
www.bsp.gov.ph
E-mail: bspmail@bsp.gov.ph
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