ADELANTE
Institutional Repository

This study aimed to assess the impact of Basel III regulations on the financial performance of Universal and Commercial Banks (UCBs) in the Philippines, specifically focusing on Return on Equity (ROE) and Return on Assets (ROA) indicators. Basel III guidelines were introduced in response to the global financial crisis of 2008-2009, aiming to enhance the stability and resilience of the banking system. The research investigated whether the transition from Basel II to Basel III, with the adoption of more stringent regulatory frameworks, affected the profitability ratios of UCBs. It relied on secondary data from the published annual financial and sustainability reports of Philippine UCBs from 2008 to 2021. By conducting paired sample t-tests, the study examined the ROE and ROA values of UCBs under both Basel II and Basel III frameworks. The findings indicated that, on average, ROE and ROA decreased under Basel III compared to Basel II. However, the differences in these indicators between the two frameworks were not statistically significant. These results suggest that the implementation of Basel III regulations may have influenced the profitability of UCBs, as evidenced by the lower average ROE and ROA under Basel III. To gain a more comprehensive understanding, future researchers should explore the intertwined influence of Basel III regulations and external factors, thus providing a more nuanced assessment.