Philippine Banks' Total Assets Surpass P31 Trillion Mark, Reaching New Record High

MANILA, Philippines — Philippine banks’ total assets crossed the P31-trillion mark in June to reach a new record high, demonstrating the resilience of the industry despite lingering risks from the Middle East conflict. Total assets of local lenders grew by 10.4 percent from a year earlier to P31.13 trillion, latest data from the Bangko Sentral ng Pilipinas (BSP) showed. The figure includes cash and due from banks, loans, investments, real and other properties acquired and other assets. Ruben Carlo Asuncion, chief economist at UnionBank of the Philippines, said the continued expansion in bank assets was supported by healthy loan growth, steady deposit inflows, and expanding investment holdings. “While the Middle East conflict has raised external risks through higher oil prices and inflation concerns, domestic liquidity remains ample and credit demand continues to be constructive,” Asuncion said. Broken down, the banking sector’s total loan book reached P17.78 trillion, up nearly 12 percent from a year earlier. This includes interbank lending and short-term placements with the central bank. Investments also expanded, rising by 8.5 percent to P9.1 trillion. At the same time, real and other properties acquired by banks in settlement of loans and receivables amounted to P207.82 billion, up by over 21 percent. Other assets likewise grew nearly 22 percent to P2.6 trillion. On the liabilities side, local banks’ obligations rose nearly 11 percent to P27.4 trillion in June. Deposits—the industry’s main funding source—made up the bulk, increasing 8 percent to nearly P22.39 trillion. Further, capital stock amounted to P1.55 trillion, up nearly 1 percent. The BSP has said banks and nonbank financial institutions remained on solid footing, adding that the financial sector was better equipped when the Middle East crisis rattled global markets earlier this year. The central bank has pledged to “take necessary actions” to steer inflation back to its 3-percent target. Last month, it raised its benchmark interest rate by 25 basis points to 4.75 percent, its second increase in the current tightening cycle and a cumulative 50 basis points of hikes. “Looking ahead, we expect bank assets to keep growing, although the pace may become more sensitive to geopolitical developments and their implications for inflation, interest rates and business sentiment,” Asuncion said. INQ