TOTAL assets of the Philippine banking system have grown to P27.64 trillion as of end-March, the Bangko Sentral ng Pilipinas (BSP) said.
Data from the BSP showed the banks’ assets in March rose by 2.6 percent from P26.95 trillion in February and by 7.8% from P25.65 trillion in March 2024.
The banking industry’s assets were mainly in the form of loans, which reached P15.14 trillion in March, or 14.5 percent higher than P13.22 trillion in March last year.
Its loan portfolio in March was also 3.1 percent up from P14.68 trillion posted in February.
Net investments which form part of the bank’s total assets were valued at P8.23 trillion in March, an 11.9 percent increase from P7.35 trillion a year earlier.
Compared with P7.76 trillion as of end February, net investments increased by 6 percent.
Cash and due from banks fell 28.9 percent to P2.09 trillion last March from P2.94 trillion in March 2024. The same items were down 11.98 percent from P2.37 trillion last February.
Central bank data also showed the banking system’s liabilities went up by 7.3 percent to P24.18 trillion from P22.53 trillion a year earlier. Their liabilities were also up 2.7 percent from P23.54 trillion a month earlier.
Deposits were the bulk of the system’s liabilities which amounted to P20.16 trillion, a 5.4 percent increase from P19.12 trillion year-on-year. This item was also 2.1 percent higher compared with P19.74 trillion month-on-month.
Resilient financial sector
“The 2.6 percent month-on-month increase (from Feb) suggests that banks remain confident in expanding their balance sheets amid easing inflation and gradual monetary policy normalization,” Paolo Rivera, a senior research fellow from the Philippine Institute of Development Studies, said.
This also signals the sector’s readiness to support broader economic activity, including lending to households, MSMEs, and infrastructure projects, Rivera said in a message to this paper.
“Continued growth of the PH banking system’s total assets reflects a resilient financial sector,” Rivera said, citing the industry’s sustained credit activity, strong deposit inflows, and a stable macroeconomic environment.
Better than GDP growth
Michael Ricafort, the chief economist from RCBC, noted the 7.8 percent year-on-year growth of bank assets was better than the GDP growth of 5.4 percent in the first quarter of 2025.
Ricafort traced the banking industry’s growing resources to growth in loans and investment.
This is supported by bank deposits that partly funded growth in loans and investment, he said.
At this point, Ricafort said any further US Fed and BSP rate cuts would lead to more trading and other investment gains for banks, on top of the positive effects of cuts in banks’ reserve requirement, which took effect on March 28.
As a result, banks are expected to gain higher loanable funds and lower intermediation costs.
But these gains will tend to be offset by higher import tariffs from the US, causing global trade, investments, employment, and overall world economic growth to slow down, Ricafort said.
“This, in turn, could indirectly act as potential headwinds for the local banking industry’s growth,” he added.
