Fitch: Impairment low for Philippine banks

Fitch Ratings said it said that notwithstanding extremely challenging macroeconomic conditions and reasonably-stressed assumptions simulated by the agency, the probability of capital impairment for most Philippine banks still appears low.

The agency also noted the banks' earnings - although possibly lower in 2009 and 2010 versus 2008 - appear adequate to fully absorb the credit costs associated with asset quality deterioration.

This means that the banks' loss absorption capacity would likely remain adequate and financial strength largely intact, which is the main reason Fitch said it still maintains a stable outlook on most banks' credit ratings, even with very weak macroeconomic indicators.

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