THE PHILIPPINE financial system’s total resources rose by 7.23% as of February, driven by the banking sector, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
Resources held by banks and nonbank financial institutions increased to P33.61 trillion at end-February from P31.33 trillion in the same period a year ago.
Month on month, however, this slipped by 0.49% from P33.78 trillion as of January.
Financial institutions’ resources include funds and assets such as deposits, capital, as well as bonds or debt securities.
Broken down, the banking sector’s resources grew by 7.8% to P27.78 trillion as of February from P25.77 trillion in the same period in 2024, BSP data showed.
Universal and commercial banks accounted for the bulk or 77.24% of total resources, rising by 7.55% year on year to P25.96 trillion from P24.14 trillion a year prior.
Meanwhile, resources held by thrift banks amounted to P1.17 trillion at end-February, up by 6.97% from P1.09 trillion in the comparable year-ago period.
Digital banks’ resources surged by 33.05% to P126.8 billion as of February from P95.3 billion in the previous year. The BSP began consolidating data from digital banks starting March 2023.
Lastly, the total resources of rural and cooperative banks stood at P527.1 billion in the period, climbing by 18.05% from P446.5 billion a year prior.
Meanwhile, nonbank financial institutions’ resources went up to P5.83 trillion as of end-September 2024 from the P5.56 trillion recorded at end-2023, central bank data showed.
Nonbanks include BSP-supervised investment houses, financing companies, securities dealers or brokers, pawnshops and lending investors.
Nonstock savings and loan associations, credit card companies, private insurance firms, authorized agent banks and forex corporations, the Social Security System, and the Government Service Insurance System are also considered as nonbank financial institutions.
The growth in the Philippine financial system’s total resources was driven by the continued expansion of banks’ loan portfolios as they continued to ramp up lending to the consumer sector, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Outstanding loans of universal and commercial banks rose by 12.2% year on year to P13.03 trillion at end-February from P11.61 trillion in the same period in 2024, latest BSP data showed. This was slower than the 12.8% expansion in January, which was the fastest in two years.
Year on year, bank lending growth was faster than the 8.7% increase in February 2024.
Consumer loans jumped by 24.1% year on year to P1.62 trillion, slightly slower than 24.4% in the previous month.
“Furthermore, the country’s large banks are among the most profitable industries in the country’s, thereby adding to banks’ capital and total resources,” Mr. Ricafort added.
Meanwhile, the Philippine banking system’s combined net profit increased by 9.76% to P391.28 billion in 2024 from P356.49 billion in 2023, latest BSP data showed.
Mr. Ricafort said the ongoing market volatility and economic uncertainties due to the Trump administration’s protectionist policies could have a negative impact on the Philippine financial system’s resources as these could affect major industries.
Still, this could be offset by further policy rate cuts that could boost bank lending, he added.
The BSP last week cut benchmark interest rates by 25 basis points (bps) to bring the policy rate to 5.5%, as expected by all 17 analysts in a BusinessWorld poll, putting its easing cycle back on track after an unexpected pause in February.
BSP Governor Eli M. Remolona, Jr. said the Monetary Board is considering further rate cuts this year in “baby steps” of 25 bps at a time.
The Monetary Board has now reduced borrowing costs by a cumulative 100 bps since it kicked off its rate-cut cycle in August last year. — A.M.C. Sy
