In its latest report, the regulator said the banking sector accounted for 83.4 percent of the financial system’s total resources, further cementing its role in supporting domestic economic growth.
Total banking assets rose to P26.2 trillion by June 2024, reflecting a 12.4-percent year-on-year increase, faster than the previous year’s 9.1 percent and above the 11 percent prepandemic rate. The asset expansion was primarily funded by domestic deposits and was directed toward lending and investment activities, which made up 81.6 percent of total assets.
“Banks remain the pillar of the Philippine financial system,” BSP Governor Eli Remolona Jr. said. “The BSP’s financial reforms help sustain the resilience of the banking sector, enabling banks to take a bigger role in the domestic economy through continued financial services to their clients, ultimately improving the financial future of every Filipino.”
Loans reached P14.3 trillion, with notable growth in household loans for consumption, up by 23.3 percent, and real estate loans, up by 12.1 percent. The real estate sector held 18.3 percent of total loans, followed by household consumption loans at 13.3 percent, highlighting the banking sector’s role in meeting both consumer and business credit demands.
Despite challenging conditions from rising interest rates, banks continued to provide credit support to priority sectors, including micro, small, and medium enterprises and agriculture. Bank financing for these smaller businesses reached P488.1 billion, while loans to agriculture, fisheries, and rural development exceeded requirements, reaching P1.7 trillion.
The non-performing loan ratio slightly increased to 3.5 percent from 3.4 percent a year earlier, as some borrowers faced post-pandemic financial strains. However, banks maintained a high bad loan coverage ratio of 95.4 percent, supported by proactive provisioning and risk management practices.
Deposits surged by 9.5 percent to P19.5 trillion, reflecting depositor confidence and providing a stable funding base. Capital strength also improved, with a 10.6-percent increase, reaching P3.2 trillion, while the industry posted a net income of P190.3 billion, up by 4.1 percent from the previous year.
The BSP said its continued reforms, aimed at enhancing banking resilience and promoting sustainable finance, have positioned the Philippine banking sector to support economic recovery and ensure financial stability amid evolving market conditions.
