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Young Economist
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Fitch Ratings, an international ratings agency, assigned a grade of 'BB' to the country's banking sector. A grade of 'BB' means that the banking sector is considered below investment grade and the the sector may be prone to volatility within the economy. Of course, this is not surprising considering the ongoing global financial crisis. Banks all over Asia have been heavily hit by the crisis.
Finch is expecting the banking sector to slow down this year due to lower revenues and higher NPLs or nonperforming loans. In addition to this, the local banking sector is plagued with bad assets. As of this year, the agency estimates that the banking sector has about Php 200 billion worth of bad assets — remaining virtually unchanged since 2000.
