By Katherine K. Chan
THE TOTAL RESOURCES of the Philippines’ financial system grew by 6.4% year on year as of July, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
Resources held by banks and nonbank financial institutions climbed by 6.4% to P34.592 trillion in the first seven months of the year from P32.504 trillion a year ago.
Total resources slipped by 1.3% from the P35.17 trillion logged at end-June.
These resources include funds and assets such as deposits, capital, and bonds or debt securities.
Preliminary BSP data showed the banking sector’s resources went up by 6.7% to P28.601 trillion at end-July from P26.799 trillion a year ago.
Resources of universal and commercial banks rose by 6.2% year on year to P26.664 trillion at end-July, while thrift banks’ resources went up by 23.1% to P1.371 trillion and digital banks’ resources jumped by 33.1% to P141.7 billion.
However, resources held by rural and cooperative banks declined by 11.3% to P424.9 billion at end-July.
Meanwhile, nonbank financial institutions’ (NBFI) resources increased by 5.02% to P5.99 trillion as of March from the P5.704 trillion posted at end-July 2024. There was no data for NBFI’s as of end-July.
Nonbanks include BSP-supervised investment houses, finance companies, security dealers, pawnshops and lending companies. Nonstock savings and loan associations, credit card companies, private insurance firms, the Social Security System and the Government Service Insurance System are also nonbank financial institutions.
“The Philippine financial system’s resources rose to P34.592 trillion in July, up 6.4% year on year, driven by strong credit growth and asset expansion amid resilient domestic demand,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said in a Viber message.
On the other hand, Mr. Asuncion noted that seasonal adjustments and portfolio rebalancing likely led to the month-on-month decline.
“Moving forward, liquidity conditions, BSP policy actions, and macroeconomic trends will be key drivers of resource growth,” Mr. Asuncion said. “We remain confident in the financial system’s ability to support the economy’s evolving needs and sustain its growth momentum.”
Meanwhile, John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message that the increase in the financial system’s resources reflected stable monetary conditions.
“It reflects continued asset expansion in banks and nonbank institutions, supported by steady credit activity, capital market investments, and deposit inflows amid stable monetary conditions,” he said.
“However, the (month-on-month) dip in July may signal temporary liquidity adjustments, debt servicing, or portfolio reallocations by financial institutions.”
Mr. Rivera added that interest rate adjustments, inflation outlook and fiscal conditions would determine how the financial system’s resources will develop in the coming months.
