Economic fallout from pandemic weakens banks’ optimism

The heads of the country’s banks are slightly less optimistic about the industry’s prospects over the medium term due to what they believe would be the lingering economic impact of the coronavirus pandemic, according to a central bank poll during the second half of last year.

The Bangko Sentral ng Pilipinas said its semi-annual Banking Sector Outlook Survey – part of the BSP’s surveillance toolkit – showed that chieftains of the country’s biggest financial institutions expressed more “subdued optimism” compared to previous periods.

This less optimistic view was attributed to disruptions in activities of the domestic economy due to lockdowns along with the global spillover from soft demand, weaker tourism and lower remittances from overseas Filipinos.

The central bank said, “Majority of the respondents projected that real gross domestic product growth will return to a range of less than 6 to 6.3 percent within the next two years.”

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