S&P: Phl banks face risks amid shifts in US policies

Philippine banks, alongside their regional counterparts, are bracing for heightened volatility this year as shifting trade policies in the US under President Donald Trump's administration reshape global financial conditions, according to S&P Global Ratings.

- By KEISHA TA-ASAN

In a report, the debt watcher said financial institutions in the Asia-Pacific region, including the Philippines, may experience secondary effects from policy uncertainties, which could impact borrowers and, in turn, banks.

"Financial institutions will most likely incur secondary effects from the added uncertainty and volatility that we anticipate. The direct ratings effects could still be profound," S&P said.

The complexity of cross-sector and cross-regional linkages makes the full extent of these effects difficult to predict, it said.

S&P said potential US tariffs on key industries such as the Mexican auto sector could have spillover effects on Asian car manufacturing hubs, including Japan, Korea and China.

This could, in turn, affect banks' lending to the auto sector and other corporate clients that depend on bank funding.