Fitch warns of risk to Philippines financial sector

07/8/2013 | Business World (Philippines)

High liquidity in the Philippines' local banking system paired with the central bank's effort to reduce risk weights on foreign currency-denominated government bonds could eventually destabilize the country's financial sector, Fitch warns. "There are already early signs of accelerated growth in loans and property prices in certain urban areas. The strong gains in real asset prices since 2010 lead us to believe that the Philippines' macroprudential indicator could move quickly from '1,' indicating a low risk of systemic stress, to '3,' or high risk, if real credit growth is sustained above 15% year-on-year," Fitch said.

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