Banks on a roll

The Philippines has a robust consumer economy, fuelled by burgeoning remittances from overseas, so domestic banks have long offered one of the safest plays on the economy. Recent changes to banking regulations have further strengthened the case for the sector on fundamental grounds. Now fuelled increasingly by renewed takeover speculation as consolidation attempts gain traction, the sector looks set to outperform.

In 2002, congress passed the Special Purpose Vehicle Act, a key reform for banks offering tax and regulatory benefits that enabled them to start to offload non-performing loans.