Philippine banks may see higher bad loans and weaker earnings in the near term as slower economic growth, high energy prices and rapid growth in unsecured consumer lending raise asset quality risks, Philstar Biz reported, citing Fitch Ratings.
In a report, Fitch said underlying credit risks are likely to persist, with the sharp rise in unsecured consumer loans leaving banks more vulnerable to slower income growth and high inflation.
The credit rating agency's assessment highlights the challenges facing the Philippine banking sector amid economic headwinds.