MANILA, Philippines — Moody's Ratings has maintained its 'Baa2' credit rating on three prominent Philippine banks—Security Bank, Philippine National Bank (PNB), and China Banking Corp.—while upgrading Security Bank's outlook from 'negative' to 'stable'.
In a series of announcements on Monday, the global credit agency highlighted that the 'Baa2' rating, which signifies moderate credit risk and investment-grade status, reflects the banks' strong liquidity and adequate capacity to meet financial commitments, despite some pressures on loan quality.
"The affirmation also reflects the bank’s strong liquidity which balances its modest funding," Moody's stated in its assessment.
For Security Bank, the shift to a stable outlook alleviates concerns over a potential downgrade, which could have increased borrowing costs. Moody's noted that the bank's capitalization should provide a buffer against modest deterioration in asset quality and profitability through 2026 and 2027.
Regarding PNB, Moody's affirmed its stable outlook, citing robust capitalization and strong profitability that offset modest, though improving, asset quality. The agency also pointed to the bank's extensive branch network, which supports stable deposit funding and high liquidity levels.
China Banking Corp. also received a stable outlook, with Moody's expecting its credit profile to remain broadly stable over the next 12 to 18 months, supported by strong capitalization.
However, Moody's cautioned that asset quality across these institutions may weaken moderately in the coming years due to factors such as seasoning pressures in retail loan portfolios, the residual impact of a flood-control probe, and rising living costs affecting borrowers' repayment capacity.
The ratings affirmations come amid a broader economic context where Philippine banks continue to navigate challenges while maintaining foundational financial strength.