Resources of banks hit P6.9T in February

MANILA, Philippines—Resources of the country’s banking sector again rose in February, driven largely by rising deposits from households and corporate entities amid growing income levels, the Bangko Sentral ng Pilipinas reported on Monday.

According to the BSP, the growing resources of banks will bolster consumption and investment activities, fueling the economy’s overall growth.

Data from the central bank showed that the banking sector’s resources amounted to P6.9 trillion by the end of February, up by 8.1 percent from P6.5 trillion in the same period last year.

Of the total resources, universal and commercial banks accounted for 90 percent. Thrift and rural banks accounted for the rest.

“The increase could be traced to the growth in deposits, indicative of the public’s continued trust in the banking sector,” the BSP said in a report.

Data from the central bank showed that as of end-December 2010, there were 758 banking institutions in the country, a reduction from the 785 reported in the same period the previous year.

The reduction was attributed to the exit of weaker industry players, said the central bank. In the past two years, several rural banks had difficulty meeting the regulator’s capitalization requirements and had to close down.

Of the total, 38 were classified as universal and commercial banks, 73 thrift, and 647 rural.

The BSP said that even with the reduced number of banking institutions, accessibility of banking services in the country had improved. This is because the remaining players expanded their businesses via the establishment of more branches.

The number of bank head offices and branches in the country stood at 8,869 as of end-December last year, up from 8,620 in the same period the previous year.

The bulk of the bank offices, however, are concentrated in urban areas, such as Metro Manila and Cebu and Davao cities. The banks are now being encouraged to put up more branches in remote areas, the BSP added.

Industry members expect to lend more to consumers and corporate borrowers this year as their resources grow. Credit expansion is estimated to reach close to 10 percent this year.

Central bank officials said the country’s banking sector remained sound and stable, as reflected by key indicators.