By Luisa Maria Jacinta C. Jocson, Reporter
THE PHILIPPINE BANKING industry’s total assets jumped by 9.3% yr on yr as of end-January, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
Banks’ combined assets rose to P27.11 trillion as of end-January from P24.81 trillion in the identical period a yr ago.
Month on month, total assets slid by 1.2% from P27.43 trillion as of end-December.
Banks’ assets are mainly supported by deposits, loans, and investments. These include money and due from banks in addition to interbank loans receivable (IBL) and reverse repurchase (RRP), net of allowances for credit losses.
The banking sector’s total loan portfolio inclusive of IBL and RRP climbed by 13.7% to P14.69 trillion as of end-January from P12.92 trillion in the identical period a yr ago.
Net investments, or financial assets and equity investments in subsidiaries, went up by 5.8% to P7.68 trillion as of end-January from P7.25 trillion a yr prior.
Net real and other properties acquired increased by 9.3% yr on yr to P117.14 billion from P107.13 billion in the identical period in 2024.
However, money and due from banks amounted to P2.65 trillion as of end-January, down by 1.4% from P2.69 trillion a yr earlier.
Banks’ other assets jumped by 7.4% to P1.98 trillion from P1.84 trillion within the previous yr.
Meanwhile, the overall liabilities of the banking system rose by 9.2% to P23.71 trillion from P21.71 trillion within the year-ago period.
“Philippine banks’ total asset growth is consistent with the undeniable fact that they’re amongst essentially the most profitable industries within the country, with earnings growth much faster than GDP growth for the country’s largest banks,” Rizal Business Banking Corp. Chief Economist Michael L. Ricafort said.
“Because of this, relatively large earnings partly add to the capital of banks, on top of banks’ various fund-raising activities through capital markets or strategic investors.”
Latest data from the BSP showed the online profit of the country’s banking industry rose by 9.76% yr on yr to P391.28 billion in 2024.
The expansion in total assets can also be consistent with strong lending activity, Mr. Ricafort said.
Bank lending jumped by 12.8% to P13.02 trillion in January, its fastest pace in over two years, separate central bank data showed.
Mr. Ricafort also noted the manageable bad loan ratio which could “partly improve banks’ asset quality, profitability, and overall total resources.”
The banking industry’s nonperforming loan ratio rose to three.38% in January from 3.27% in December. Nevertheless, this was lower than 3.44% in the identical month in 2024.
“The Philippines stays certainly one of the fastest-growing economies in Asia, so the banking industry can be certainly one of the largest beneficiaries when it comes to faster growth in loans, deposits, spreads, fee income, and overall revenues,” Mr. Ricafort added.
