The Philippine financial system’s resources rose at a healthy pace at the end of the first quarter, fueled by rising incomes as a result of the country’s growing economy.
Data from the Bangko Sentral ng Pilipinas (BSP) showed the increase was driven by universal and commercial banks, which accounted for about 73 percent of the financial system and 90 percent of the banking sector.
At the end of March, the financial system’s resources rose 8.3 percent to a total of P14.09 trillion. Resources of all types of banks, which accounted for 80 percent of the total, rose 8.7 percent.
The financial system’s resources refer to total assets of commercial, thrift, and rural banks, as well as non-bank financial intermediaries gross of provisions for probable losses, accumulated bond discounts, and accumulated market gains and losses.
Non-banks refer to, among others, insurance providers, lending firms, pawnshops, credit card companies and investment companies.
In a previous report, the BSP said the Philippine banking system continued to sustain “its robust performance, supported by the country’s strong macroeconomic fundamentals and solid growth prospects.”
Growth in resources decelerated from the 11.8-percent expansion posted in the fourth quarter of 2014. The BSP traced this to the slower expansion in bank loans during January to March of 2015.
Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, rose by 13.7 percent in March, slower than the 15.2 percent growth recorded in February, and the 16.8-percent increase at the end of December 2014.
The slower increase in loans is a reflection of the Philippine economy’s disappointing performance in the first quarter, when it expanded by just 5.2 percent, the slowest pace in three years.
Measures to tighten monetary policy settings were also put in place by the Bangko Sentral ng Pilipinas (BSP) last year, forcing banks to moderate lending behavior. As a percent of gross domestic product (GDP), total resources accounted for 88.9 percent in the first quarter.