THE capital-adequacy ratio (CAR) of Philippine banks has slipped in the first quarter of 2008 while staying above the 10-percent minimum prescribed by the central bank and the 8-percent international standard.

The measure, also known as CAR, is a percentage of a bank’s risk-weighted exposure in relation to its capitalization.

The industry’s CAR stood at 14.49 percent on solo basis (head office and branches) and 15.49 percent on consolidated basis (parent bank and subsidiaries) by the end of March.

These levels compare to 14.71 percent by the end of 2007 on solo basis and 15.70 percent on consolidated basis, according to Bangko Sentral ng Pilipinas (BSP) numbers. 

As of March 31 last year, the ratios were recorded at 17.54 percent on solo basis and 18.83 percent on consolidated basis.

“The decline is attributable, among others, [to] the assignment of higher risk weights to certain assets and the incorporation of operation-risk charge in the capital-adequacy framework,” the BSP said in a statement on Thursday.

These changes, it said, contributed to the increase in risk-weighted assets (RWA) of P157 billion quarter-on-quarter on solo basis, while qualifying capital over the same period increased by just P15.5 billion.

“Increases in RWAs, which are much larger than their corresponding increases in qualifying capital, are consistently found across bank categories,” the BSP said. The CAR of universal and commercial banks stood at 14.46 percent on solo basis and 15.66 percent on consolidated basis at the end of March, lower than figures posted three months earlier.

BSP papers also show the CAR for thrift banks improved to 15.16 percent, for both solo and consolidated bases, from 15.12 percent (solo) and 15.13 percent (consolidated) as of end-2007.

S&P maintains ‘stable outlook’ on RP debt

STANDARD & Poor’s (S&P) has kept its “stable outlook” on the Philippines’ credit ratings, saying Asia-Pacific countries are in much better shape to withstand the impact of an intensifying global financial crisis.

OFW money likely to endure financial crisis

MONEY that overseas Filipino workers (OFWs) send back to the Philippines will likely endure the global financial turmoil, according to a former Central Bank governor.

Optimism on growth boosts peso from 17-month low

THE Philippine peso rose from a 17-month low on speculation economic growth will improve after the central bank signaled it might join policymakers in the US, Europe and Asia by cutting interest rates. Bonds fell.

BSP may keep its policy rates unchanged—economists

With double-digit inflation still hounding the Philippines as of last month, the Bangko Sentral ng Pilipinas may deviate from the move by central banks that lowered interest rates amid fears of a global recession economists said on Thursday.

Local banks have enough capitalization

THE capital-adequacy ratio (CAR) of Philippine banks has slipped in the first quarter of 2008 while staying above the 10-percent minimum prescribed by the central bank and the 8-percent international standard.

PDIC supports higher amount of deposits insured

Philippine Deposit Insurance Corp. (PDIC) president Jose Nograles said the PDIC fully supports proposals to double the maximum deposit insurance coverage (MDIC) from P250,000 to P500,000.