Fitch downgrades Philippine banking outlook to negative

Fitch Ratings downgraded its outlook on the Philippine banking industry to 'negative' from 'stable', citing rising asset-quality risks due to the COVID-19 outbreak.

The negative outlook indicates a potential downgrade of banks’ ratings in the short to medium-term, reflecting concerns over declining interest rates and an economic slowdown caused by the enhanced community quarantine on Luzon Island, which accounts for more than 70% of the nation's output.

Fitch also noted pressure on revenue from the recent policy rate cuts by the Bangko Sentral ng Pilipinas (BSP).