Total resources of the Philippine financial system expanded by 7.27 percent to P33.611 trillion in February from P31.333 trillion a year earlier, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.
Compared with the month earlier, however, the financial system’s resources were down 0.14 percent from P33.658 trillion in January, BSP data showed.
The BSP said the total resources of the financial system consist of funds and assets held by both banks and non-bank financial institutions, including deposits, capital and bonds or debt securities.
Banks accounted for P27.782 trillion, or 82.66 percent of the total resources in February.
Bank resources rose 7.8 percent to P27.782 trillion in February from P25.772 trillion a year earlier.
Assets of non-bank financial institutions rose to P5.829 trillion in the same comparable period, accounting for 17.34 percent of the total. This was 4.82 percent higher than the P5.561 trillion in February 2024.
The BSP said universal and commercial banks resources expanded 7.55 percent to P25.963 trillion from P24.141 trillion.
Thrift banks posted a 6.97 percent growth to P1.166 trillion from P1.09 trillion.
Digital banks posted the biggest year-on-year increase of 33.05 percent to P126.8 billion from P95.3 billion in.
Rural and cooperative banks posted an 18.05 percent gain to P527.1 billion from P446.5 billion.
Supportive monetary stance
“The BSP’s supportive monetary stance earlier, coupled with a resilient banking system, encouraged lending and investment activity,” Philippine Institute for Development Studies senior research fellow John Paolo Rivera said.
“Market confidence and the gradual economic recovery have also played a role in boosting overall resources,” he added.
Growing loan portfolio
For his part, Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the year-on-year increase largely reflects the banking sector’s growing loan portfolio to 12 percent in recent months, or more than twice faster than the country’s economic growth.
“Furthermore, the country’s large banks are among the most profitable industries in the country, thereby adding to banks’ capital and total resources,” he said.
“Lower Fed and BSP rates by about -1.00 since the latter part of 2024 led to lower borrowing costs and financing costs that reduced funding costs and increased demand for loans and credit,” Ricafort added.
In light of US President Donald Trump’s reciprocal tariffs and other protectionist measures, global investments, trade, employment and world economic growth could slow down and weigh on Philippine exports, he said.
“This could also slow down growth in the country’s major businesses and industries, thereby a potential drag on the business growth of banks and the financial system,” Ricafort added.
