Browsing by Author "Hao, Nicole Ranna M."

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    The impact of Basel III implementation on ASEAN financial integration
    (2015-01) Hao, Nicole Ranna M.; de Dios, Emmanuel S.
    This paper seeks to examine the impact of Basel ill implementation in the ASEAN5 region, taking into account the upcoming ASEAN financial integration. It attempts to provide information on the Basel Accords and a background on its evolution, delving into the Asian Financial Crisis and Global Financial Crisis. To give context on the historical performance of banking industries in ASEAN5 countries, trend analysis of key performance indicators from the late 1990s to 2011 is also discussed, results of which showed a general improvement in the quality of loans and quantity of capital. Present performance of the largest banks per country under Basel III is also evaluated to understand the relative standing of Philippine banks in the region. Philippine banks are one of the smallest banks within the ASEAN5 and are also one of the least efficient in terms of transforming deposits into loans and generating return on equity. With ASEAN Economic Community set for 2015 and the recent signing of the law on liberalizing foreign bank entry in the country, this study hypothesized the expansion prospects for the Philippine banking industry and the ability of top local banks to maintain market share despite increased competition. Although, this study also found that Philippine-owned banks will have more difficulty in the competition and expansion of their business (because of higher capital requirements and fast-tracked implementation). With ample liquidity in the domestic market, excess funds are also expected to flow out of the country as local investors become active participants in the region. As the financial sector grows, the industry will remain stable since the necessary safeguards, including Basel III, have been put in place in anticipation of the integration.