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MANILA, Dec 2 Asia Pulse - Improved asset quality and the reduced level of non-performing loans (NPLs) of commercial banks have contributed significantly to the stability in the country's banking system.
In fact, the banking system's capital base was above its domestic and internationally prescribed capital standards, says a Bangko Sentral's third quarter report.
Although it said that lending did not appreciate well, despite the strong liquidity. BSP records show that total stock of outstanding commercial bank loans fell further from its previous level in July 2002 by 2.9 per cent as compared to its decline in April 2002.
BSP reasoned out that the banks continued to be cautious in extending new credits to those creditors who wanted to expand their business operations.
Instead, most of them have parked their funds in fixed government securities or with the BSP's reverse repurchase and special deposit account facilities due to weak corporate credit demand.
As of August 2002, the banks' excess fund placements with the BSP's facilities reached P93.8 billion (US$1.73 billion) and P6 billion from P28.2 billion and nil as of end of dec. 2001.
It also reported that the ratio of net worth to risk assets of banks ...