The resources of the Philippine financial system totaled P29.079 trillion as of end-August, up seven percent from same period last year of P27.181 trillion, according to the latest data from the Bangko Sentral ng Pilipinas (BSP).
The banking sector with P24.046 trillion accounted for 83 percent of the total financial resources which was 7.95 percent more than end-August 2022’s P22.276 trillion.
The expansion in total resources was financed by deposits. This reached P14 trillion as of end-June 2023 which was the latest data from the BSP. Deposits were up 7.2 percent from the previous year and by 1.3 percent from end-March this year.
The BSP in a report said deposits -- mostly in time deposits -- increased by 42.8 percent year-on-year which was an “indication of consumers locking in funds for higher returns amid the rise in interest rate environment.”
The BSP added that the “continued (year-on-year) expansion in deposits reflected the sustained confidence in the Philippine banking system despite periods of uncertainty in the global financial market amid the reported failure of US and European banks early this year.”
Besides banks, the non-banking financial institutions (NBFIs) also hold some these financial resources which are funds and assets in the form of not just deposits, but also capital and bonds or debt securities.
There are 45 universal and commercial or the big banks with total resources of P22.593 trillion during the period, up by 7.8 percent from P20.958 trillion last year.
The 43 thrift banks, on the other hand, contributed P1.056 trillion which was almost 12 percent higher than last year’s P943 billion.
The rural and cooperative banks have delayed data and as of end-March, the sector have total resources of P397 billion, up 5.86 percent from P375 billion in 2022. There are 404 rural and cooperative banks in the country.
Similar with rural and cooperative banks, the BSP also takes its time in reporting NBFIs’ resources. As of end-December 2022, NBFIs accounted for P5.033 trillion of total resources, up 2.58 percent from P4.906 trillion in 2021.
NBFIs are investment houses, finance companies, investment companies, securities dealers/brokers, pawnshops and lending investors. Non Stocks Savings and Loan Associations (NSSLAs), credit card companies under BSP supervision, private insurance firms, Social Security System and the Government Service Insurance System are also classified as NBFIs.
There are 1,329 NBFIs without quasi-banking function such as investment firms, NSSLAs and pawnshops. Only five NBFIs have quasi-banking function which means they can borrow funds from 20 or more lenders. These include investment houses with trusts business, financing companies, among others.
Last year, the financial system’s total resources amounted to P28.806 trillion, up by 9.3 percent from 2021’s P26.357 trillion.
The BSP said the Philippine banking system continued to improve, particularly in terms of resources and asset quality, despite a weaker gross domestic product (GDP) growth. The GDP grew by 4.7 percent in the second quarter, lower compared to 6.4 percent in the first quarter this year.