MANILA, Philippines – The combined resources of the banking sector climbed to a new record high as of June, reflecting the strength of the local banking industry, the Bangko Sentral ng Pilipinas reported yesterday.
The resources of universal, commercial, thrift, and rural banks grew by 18.8 percent to a record high of P10.606 trillion as of June from P8.931 trillion in the same period a year ago.
The rise in bank resources, which includes deposits, profits, and retained earnings, indicates their ability to cover the funding needs of corporate and household clients amid the backdrop of a growing economy.
This also shows they have enough to act as a buffer against possible external shocks that could threaten the stability of the financial system.
Universal and commercial banks accounted for 90 percent of the total banking system’s resources as of June, while thrift banks held eight percent. Rural banks had the remaining two percent.
Resources of the big banks rose 19.4 percent to P9.546 trillion as of June from P7.996 trillion, while thrift banks grew their resources by 15 percent to P851.1 billion from P739.9 billion.
Rural banks also increased their resources by 6.9 percent to P209.4 billion as of June from P196 billion in the same period last year.
The continued increase in the banks’ resources reflects the strength of the sector, partly due to the reforms implemented by the central bank.
Banks accounted for 81.4 percent of the Philippine financial system’s total resources as of June.
The resources of the entire financial system grew by 15.4 percent to P13.034 trillion as of June from P11.291 trillion in the same period last year. This was driven by a sustained rise in the banks’ resources as well as an expansion in those held by non-banks.
Non-banks saw their resources climb 2.9 percent to P2.428 trillion as of June from P2.36 trillion in the same period a year ago.
Non-banks are made up of investment houses, finance companies, investment firms, securities dealers and brokers, pawnshops, lending investors, non-stock savings and loan associations, credit card companies, and insurance companies.