Bangko Sentral ng Pilipinas (BSP) reported total assets of the banking system grew 9.3 percent year-on-year in January 2025, prompting analysts to take note of the ‘impressive growth rate.”
Data from the BSP showed the banks’ assets amounted to P27.109 trillion in January 2025 from P24.807 trillion in January 2024.
This proves that “banking is among the most profitable industries in the country,” the chief economist of RCBC said.
On a month-on-month basis, however, banks’ total assets declined by 1.17 percent from December’s P27.431 trillion. Liabilities also declined by 1.47 percent from December’s P24.061 trillion.
Brisk lending
Bulk of the total assets came from lending. The total loan portfolio reached P14.687 trillion, more than half or 54.18 percent of the total.
It reflected a growth of 13.70 percent from P12.917 trillion in January 2024.
The banks’ total liabilities increased by 9.10 percent to P23.707 in January 2025 from P21.711 in January 2024.
Of the total liabilities, deposits accounted for P19.934 trillion in January 2025, or 73.53 percent of the total. The amount showed a 6.83 percent increase from P18.660 trillion in January 2024, the BSP said.
Jonathan Ravelas, BDO lead strategist, said the latest figures indicate “an impressive growth rate for the Philippine banks” and a sign of brisk economic activities.
“A 9.3 percent increase in total assets and a 9.1 percent rise in total liabilities indicate a robust expansion in the banking sector. This could be a sign of increased economic activity and confidence in the financial system,” Ravelas said in a Viber message.
However, he said “continuous monitoring and prudent management are essential to sustain this growth.”
He warned of possible economic downturns, political instability, technological disruptions, inflation and interest rates as secondary effects of global policy uncertainty.
Most profitable
Michael Ricafort, RCBC chief economist, said Philippine banks’ total asset growth “is consistent with the fact that they are among the most profitable industries in the country.”
The Philippines remains one of the fastest growing economies in Asia, so the banking industry would be one of the biggest beneficiaries of this trend, Ricafort said.
These benefits include “faster growth in loans, deposits, spreads, fee income, and overall revenues, earnings, capitalization way above the local minimum standard at 10 percent and the minimum international standard of 8 percent, Ricafort said.
He noted that the banks’ earnings growth is much faster than the GDP growth of the country’s largest banks, as consistently seen for many years.
“As a result, relatively large earnings add to capital of banks, on top of banks’ various fund-raising activities though capital markets or strategic investors,” Ricafort said.
He said the banks’ total resources growth is also consistent with loan growth, at above +12 percent recently, which is more than twice the country’s GDP growth of 5.6 percent.
