PHL banks resilient despite problems abroad

The ratio of universal and commercial banks’ soured loans to the industry’s loan portfolio eased to 3.37 percent in July 2010 from 3.49 percent in the same period last year. On the other hand, the CAR of Philippine banks reached 14.9 percent on a solo basis and 15.95 percent on a consolidated basis as of end-March. The BSP said the industry’s CAR continued to exceed both the statutory level set by the BSP at 10 percent and the international standard of 8 percent under the Basel Accords, standard banking supervision regulations that control global banking The IMF noted the importance of immediately amending the BSP charter to further strengthen the country’s banking supervision and regulatory framework. Amendments to the BSP charter would give bank supervisors “stronger legal protection and allow the BSP to issue its own debt securities for the more effective conduct of monetary policy and the promotion of macroeconomic stability," Arora said. For more than five years, since the term of former BSP Gov. Rafael Buenaventura, the central bank has been pushing for its charter to be amended to strengthen its administrative and regulatory powers over banks. Among the desired amendments, the BSP wants to increase administrative fines and hasten forfeiture proceedings against erring banks. In formulating monetary policies, the central bank also wants to be able to obtain data on any person or entity involved in cases of abnormal movements in the credit market, price levels and monetary aggregate — or the total value of money supply within the economy. — JE/VS, GMANews.TV