MANILA -The Philippine financial system continued to perform strongly in the first half of 2023, particularly with banks supporting the domestic economy with their firm ability to provide products and services to their clients, according to the Bangko Sentral ng Pilipinas.
In its latest report covering the first semester, the BSP said the domestic financial system in general and banks in particular showed sustained resilience and stability with a strong balance sheet, profitable operations, sufficient capital and liquidity buffers, and ample provision for probable losses.
From January to June this year, Philippine bank’s assets grew by 9.1 percent to P23.3 trillion, of which more than half or P12.3 trillion were channeled to lending.
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A 7.8-percent increase in deposits drove the growth in assets, but the BSP said this pace was still slower than the pre-pandemic pace of 11 percent.
The central bank said Philippine banks remain well capitalized and highly liquid, with a capital adequacy ratio and key liquidity ratios exceeding the BSP regulatory and international standards.
As of the end of June, total loans grew by 8.8 percent P12.7 trillion, slightly faster than the 8.7 growth seen in the same period last year.
Lending increased on the back of a 26.3-percent surge in loans granted to household loans, representing P322.7 billion in new borrowings.
All types of household loans increased, with credit card receivables ballooning by 29.3 percent (₱140.3 billion) and salary loans jumping by 48.9 percent (by ₱135.7 billion).
Lending to households combined with loans granted to key business activities — electricity, gas, steam, and air-conditioning supply; wholesale and retail trade; real estate; financial and insurance; and information and communication — account for nearly two-thirds (64 percent) or P8.2 trillion of total bank loans.
“The overall key performance indicators of the Philippine financial system and the domestic banking system show that this sector continues to be a source of strength for the Philippines, capable of meeting the demands of a growing digital and sustainable economy,” BSP Governor Eli Remolona Jr. said in a statement.
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He said the BSP will continue to ensure that the Philippine financial system is safe and sound in keeping with its financial stability mandate.
Also, the BSP will continue to collaborate and closely work with relevant stakeholders in the adoption of key financial sector reforms aimed at ensuring institutional stability, promoting responsible innovation, and advancing sustainability in the financial system.