Moody’s Ratings lowers its outlook on the Philippine banking system to “negative” from “stable,” citing a weaker operating environment for banks and growing risks to asset quality. The credit rating agency points to mounting uncertainty as the economic fallout from the war in the Middle East could weigh on economic growth and affect borrowers’ ability to repay loans. Moody’s also warns that weakening conditions may lead to higher loan impairments, which could strain banks’ balance sheets. In addition, Moody’s notes that a memorandum of understanding involving the United States and Iran has provided only brief relief for markets, without changing the broader risk outlook for lenders. The report, dated June 19, frames the downgrade as a sign that credit conditions may deteriorate over time, affecting banks’ performance and overall financial resilience. Overall, Moody’s assessment reflects concerns about both the macroeconomic environment and the potential impact on nonperforming or impaired loans.