Philippine Thrift Banks Sustain Profit Growth Amid Digitalization and Crisis Resilience

Thrift banks in the Philippines are maintaining their stability and competitiveness by expanding their balance sheets while adapting to digital transformation, artificial intelligence (AI), and tougher cybersecurity demands, according to Jaime Valentin Araneta, president of the Chamber of Thrift Banks (CTB) and Equicom Savings Bank. "Our over five decades of serving Filipinos here and abroad speak to our battle-tested stability and resilience," Araneta said. He noted that thrift banks have endured numerous crises throughout the years, including the Asian financial crisis of the 1990s, the global financial crisis of the 2000s, and the pandemic in 2020. "Our capital strength, stable resources base, liquidity, governance, and risk management will once again help us weather the flood control controversy and runaway politics of today," he added. Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that thrift banks’ net profit rose by 11.8 percent to P5.86 billion in the first quarter, up from P5.24 billion in the same quarter last year. Total operating income jumped by 27.6 percent to P28.84 billion, supported by a 24.7-percent increase in net interest income to P24.77 billion. Non-interest income climbed by 48.7 percent to P4.06 billion, while fees and commissions more than doubled to P3.62 billion. Araneta said the industry’s latest performance indicates that thrift banks are not merely growing but strengthening their role as community-based lenders for households and micro, small, and medium enterprises (MSMEs), even as competition intensifies from digital banks, fintech firms, and electronic money issuers. "These are not incremental gains. They are structural signals of strength," Araneta stated. "They show that thrift banks are not only stable, we are expanding responsibly and competitively." The sector also continued to expand its balance sheet. Total assets rose by 11 percent to P1.4 trillion as of end-May from P1.27 trillion in the same period last year, driven by steady loan growth, stronger deposits, and a wider capital base. The sector’s gross total loan portfolio grew by 13.4 percent to P1.07 trillion from P939.67 billion a year earlier, reflecting continued demand for credit from households and small businesses. Deposit liabilities also increased by 10.5 percent to P1.06 trillion from P956.75 billion a year ago, underscoring the sector’s stable funding base despite increasing competition from universal banks, digital banks, and electronic money issuers. "Moving forward, the CTB remains dedicated to partnering with the BSP to advance measures that drive operational efficiencies across the sector," Araneta concluded.