Are Philippine Banks Safe?

Wall Street and the global financial system reeled to the ropes last week in one of the worst financial crisis to hit in decades.

Aristocratic giants like the Lehman Brothers, one of the world's largest investment banks, filed for bankruptcy.  AIG, the insurance behemoth had to be aided by billions of state funds to stay afloat.  The venerable Merrill Lynch had to be bought by Bank of America for a third of its value to keep it alive.

Since financial papers are sold at premiums and discount globally, some of the Lehman papers were in the asset portfolio of some Philippine banks , namely, the BDO-PCIBank (Henry Sy), Metrobank, Development Bank of the Philippines, RCBC, Bank of Commerce and the UCPB.

But the P13 billion to P17 billion  estimated loss for these Filipino banks is not even 1% of the entire banking system and is an insignificant percentage of the assets of the individual banks - many of who had "provided" for the losses. Each of the banks mentioned is solid and the Philippine banking system is sound. Don't believe rumor-mongers, don't panic - keep your deposits where they are.