‘Philippines banks poised for growth, innovation in 2025 and beyond’
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) expressed confidence in the banking system’s resilience and potential, highlighting the industry’s strong performance in 2024 and its optimistic outlook for the years ahead.
During the 2025 Annual Reception for the Banking Community, BSP Governor Eli Remolona Jr. said it is crucial to collaborate in driving digital transformation and financial inclusion.
“As we look ahead to 2025 and beyond, I am thrilled to continue working with you to build on our shared successes,” he told close to 340 guests Friday evening.
“Let us continue working together on digitalization and financial inclusion. Let’s also intensify our efforts on Open Finance to ensure that people can choose financial services that best suit their needs,” he said.
The governor emphasized that the shared commitment between the BSP and the banking community continues to strengthen the industry as a driver of economic growth.
“Having worked with many of you over the years, I know that we share the same goals, and we share the same drive to make the banking industry a stronger engine for jobs and growth for the Filipino people,” Remolona said.
He also congratulated the community for a “milestone-filled” 2024, citing the country’s upgrade in S&P Global Ratings’ credit rating outlook.
The BSP, together with its private partners and other government agencies, also launched the interest rate swap (IRS) peso market and expanded the government repo market.
The central bank also rolled out the Financial Services Cyber Resilience Plan and helped pass the Anti Financial Account Scamming Act last year.
“We also have some new faces among us including two new members of the Monetary Board, Walter Wassmer and Jose Querubin. Their perspectives have already proven to be very helpful,” Remolona said.
In an exclusive interview with The STAR, Remolona outlined the sector’s achievements in 2024, which saw sustained growth in assets, loans, investments, deposits and earnings.
“The Philippine banking system continued its strong performance in 2024, recording sustained expansion in assets, loans, investments, deposits and earnings. Said growth momentum was accompanied by robust capital and liquidity buffers that exceed both domestic and international prudential limits,” he said.
Based on central bank data, the banking system’s total assets grew by 9.8 percent to P26.4 trillion as of October last year from a year ago. Gross total loan portfolio jumped by 11.3 percent to P14.5 trillion.
Lending and investment activities of banks, which were mainly funded by deposits, expanded by 6.7 percent to P19.46 trillion in October 2024 compared to a year ago.
Interest income from lending to private corporations and households and investment in securities continued to drive banks’ profitability. The profit of banks operating in the Philippines rose by 6.4 percent to P290.1 billion from January to September last year compared to the previous year’s P272.6 billion.
As of end-September 2024, the banking system’s solo and consolidated capital adequacy ratios were 16.4 and 16.9 percent, respectively, higher than the 10 and eight percent regulatory thresholds of the BSP and the Bank for International Settlements, respectively.
“We expect banks to sustain this robust performance by the end of 2024,” Remolona said.
“The outlook for the Philippine banking system remains optimistic. Based on a two-year horizon (2024-2025), banks project double-digit growth in assets, loans, deposits and net income,” the BSP chief added.
Remolona said that Philippine banks are committed to maintaining capital and liquidity buffers above regulatory standards, with strategic priorities focused on credit expansion, operational efficiency and digitalization.
“Overall, the Philippine banking system is well-positioned to navigate the evolving economic and financial landscape,” he added.
On monetary policy, Remolona earlier said that the BSP has room for further easing this year as interest rates remain restrictive despite the series of rate cuts the Monetary Board did last year.
The Monetary Board slashed policy rates by 25 basis points during its policy meeting last December, bringing the key rate down to 5.75 percent. The central bank has delivered a total of 75 basis-point rate cuts since August 2024.
Prior to the rate cuts, the BSP maintained its policy rate for six consecutive meetings since November 2023. From May 2022 to October 2023, the central bank had aggressively raised rates by a total of 450 basis points to rein in inflation.
The Monetary Board decided to adjust the frequency of its policy meetings to six per year, starting in 2025, from seven meetings per year previously.
The BSP will have its first policy review this year on Feb. 20.
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