Debt watcher S&P Global Ratings said Monday Philippine banks are likely to post another year of single-digit loan growth and an increase in non-performing loans as the coronavirus disease 2019 threatens the economy and financial markets.
S&P credit analyst Nikita Anand, however, said domestic banks would be resilient to these external pressures supported by strong fundamentals.
“We expect trade and private investments to slow in Philippines due to the global coronavirus outbreak, and this will drag on banks’ lending business,” Anand said.
S&P earlier revised downward its 2020 GDP forecast for the Philippines to 5.8 percent from 6.2 percent amid the widening global spread of coronavirus.
Anand expects credit growth of 8 percent to 10 percent in 2020, down from previous forecast of 10 percent to12 percent. This means the country’s banks could see a second year of single-digit growth after a long run of double-digit expansions in previous years.
Credit growth slowed to 8.8 percent in 2019 from 15 percent in 2018 as corporate loan demand softened with the delay in the approval of the 2019 national budget and the lingering trade tensions between the US and China.
