MANILA, Philippines?The country?s banking sector posted a respectable increase in resources in 2009, when the world saw the height of the latest global economic turmoil, prompting regulators to reiterate that operations of banks in the country are generally sustainable.

Data from the Bangko Sentral ng Pilipinas showed that total resources of the banking sector amounted to P6.42 trillion as of end-December 2009, up 7.5 percent from only P5.97 trillion as of the same period the previous year.

Regulators said the increase in assets was driven largely by the rise in deposits gathered by universal and commercial banks.

Of the total resources of the banking sector, P5.69 trillion, or nearly 89 percent, is accounted for by assets of universal and commercial banks. The figure was up 9 percent year-on-year.

On the other hand, smaller banks--including thrift, savings, and rural banks--recorded combined assets of P727.4 billion, down 3.6 percent year-on-year.

BSP Governor Amando Tetangco Jr. said the increase in the assets of the Philippine banking sector despite the global turmoil was due to the implementation of regulatory reforms, such as prudent lending standards, implemented over a decade ago following the Asian financial crisis.

"Important banking reforms, particularly in the areas of corporate governance, risk management, and asset clean-up, have strengthened the banking system further, boosting its overall performance in terms of higher asset growth, enhanced asset quality, improved profitability and better capitalization," Tetangco was earlier quoted as saying.

Statistics showed that there were 8,620 banks--head offices and their branches--in the country as of end-December 2009.

Of the figure, 2,783 banks or 32 percent of the total, are located in the National Capital Region. Another 15 percent, or 1,295 banks, are in the Calabarzon area.

Regulators said banks remain a source of growth of the economy. Commercial and universal banks alone have over P2 trillion in outstanding loans extended to individual and corporate borrowers.

Lending by banks are credited for partly helping the Philippines avoid a recession last year, when many other countries contracted.

They said that banks also keep their level of exposure to bad debts minimal, with the non-performing loans (NPL) ratio of universal and commercial banks standing at only 2.969 percent in 2009, down from 4.03 percent 2008.