The resources of the domestic financial system increased by 7.99 percent to P27.42 trillion as of end-September this year compared with P25.39 trillion same period in 2021, based on the latest Bangko Sentral ng Pilipinas (BSP) data.
The banking sector accounted for bulk of the total resources at P22.65 trillion during the period, up by 9.43 percent from P20.69 billion last year. Banks’ deposits, bond issuances and capital infusion are the core of the financial system as it funds economic activities.
The big banks, or the universal and commercial banks, reported total resources of P21.31 trillion as of end-September, which was 11.70 percent higher compared with the same time last year of P19.09 trillion.
Thrift banks’ resources, meantime, declined to P945 billion or down by 25.53 percent versus P1.27 trillion in 2021.
Rural banks’ resources are not as updated as the big banks and thrift banks. As of end-June, it reported P375 billion in total resources compared to P334 billion same period last year.
The BSP noted that non-banks’ total resources which are also as of end-June only, amounted to P4.77 trillion, up by 1.64 percent from P4.69 trillion in 2021. Non-banks are investment houses, finance companies, investment companies, securities dealers/brokers, pawnshops and lending investors. Non Stocks Savings and Loan Associations, credit card companies under the BSP supervision, private insurance firms, Social Security System and the Government Service Insurance System are also classified as non-bank financial institutions.
As of end-October 2022, the BSP is supervising 498 banks. There are 45 big banks, 43 thrift banks and 404 rural and cooperative banks.
The BSP is also regulating 1,334 non-banks without quasi banking functions such as pawnshops, and five non-banks with quasi banking functions.
Based on the latest BSP Banking Sector Outlook Survey (BSOS) which was for the second semester of 2021, banks expect continued recovery in the next two years with an above six-percent economic growth, adequate capital and liquidity buffers, ample loan loss reserves and sustained profits.
BSOS which covered all of the universal and commercial banks, thrift banks and 80 of 404 rural/cooperative banks, showed that 48.3 percent of surveyed banks have optimistic views on the economic prospects, higher compared to 35.4 percent in end-December 2020.
Of the 48.3 percent, about 25.2 percent said gross domestic product or GDP will grow between six percent to 6.3 percent this year while 23.1 percent thinks it could be higher at seven percent.
The government’s 2022 GDP target is 6.5 percent to 7.5 percent. The GDP grew by 7.6 percent in the third quarter from 7.5 percent in the previous quarter despite high inflation and depreciated peso vis-à-vis the US dollar.
The big banks are the most optimistic group while the BSP said thrift banks and rural/cooperative banks have a more subdued outlook.
As of end-September, the banking system reported combined net profits of P243.06 billion, up by 43.75 percent from same period last year of P169.09 billion amid sustained growth in assets, loans, deposits and income.