Resources of the country’s banking sector rose in the first quarter from a year ago, driven partly by the increase in business activity that allowed banks to generate more deposits from corporate clients.
Data from the Bangko Sentral ng Pilipinas showed that bank resources—which included deposits and retained earnings—amounted to P7.12 trillion as of the end of March, rising by 9 percent from P6.51 trillion in the same period last year.
Of the latest figure, the bigger share of P5.77 trillion was accounted for by resources owned by universal and commercial banks.
Thrift banks have P554.73 billion in resources, rural banks have P178.21 billion.
The sustained rise in resources of banks in the country was cited by the BSP as among the factors that influenced its optimistic outlook on the banking sector’s ability to provide more financial support—through higher lending to consumers and enterprises—to the economy this year.
Industry players expect bank lending to rise this year by about 10 percent.
Latest data from the central bank showed that outstanding loan portfolio of commercial banks amounted to P2.4 trillion as of end-April, up by 14 percent from P2.12 trillion in the same period a year ago.
Some economists, however, said banks could actually lend much more given their huge resources, but were just not opting to do so.
More than P1.4 trillion of the banks’ liquid assets is parked as placements in the special deposit accounts (SDAs) of the BSP.
Banks, however, said the industry might lend more if there were more viable investment projects presented to them by the business sector.
In the meantime, the BSP maintains that the country’s banking sector remains stable.
Credit rating firms seem to buy the claim, as they cited the performance of the banking sector as one of the factors influencing their decisions to give the Philippines’ favorable credit ratings.
Last week, Fitch Ratings upgraded the country’s foreign currency-debt rating by a notch from two notches to one notch below investment grade, or from BB to BB+.