Philippine banks are sufficiently capitalized and past due ratios have also declined over the years, contributing to greater ability to intermediate funds, manage risk, and increase profitability.
The distributional and social effects of greater economic integration should rather be addressed by targeted policies that achieve fairer outcomes. This requires a strong political and institutional landscape which can ensure that the geographical scope of policy action and political debates coincide with the scope of market integration. This is a landscape which in Europe is best provided by the European Union.