Banks continue to adhere to sound credit underwriting standards as shown by the very satisfactory quality of the banking system’s loan portfolio. Moreover, banks are well prepared to bear credit losses as they have set up adequate provisions for possible defaults. They maintain an NPL coverage ratio of over 100 percent.
Moving forward, we expect further expansion of the banking system, sound asset quality, adequate liquidity and rising capital buffers. The trajectory for profit growth will continue, driven mainly by strong growth outlook, upbeat lending activities, product innovations, and more costefficient and technology-enabled operations. As the main provider of credit to key production sectors, the banking system is key to the Philippine growth story.