PH financial resources up 8.9% in Q1

The country’s financial system resources totaled P28.75 trillion as of end-March this year, up 8.9 percent year-on-year from P26.4 trillion in 2022, according to Bangko Sentral ng Pilipinas (BSP) data. Total financial resources are held by banks and non-banks. These come from deposits, capital infusion and bond issuances. Banks include the big banks or the universal and commercial banks, thrift banks, rural and cooperative banks. Non-bank financial institutions (NBFIs) are investment houses, finance companies, investment companies, securities dealers/brokers, pawnshops and lending investors. Non Stocks Savings and Loan Associations, credit card companies under BSP supervision, private insurance firms, Social Security System and the Government Service Insurance System are also classified as NBFIs. As of end-March, banks’ resources increased by 11 percent to P23.82 trillion versus P21.46 trillion same period in 2022. The big banks accounted for P22.39 trillion of total banking resources, up by  11.22 percent compared to same time last year of P20.13 trillion. Thrift banks, on the other hand, have P1.03 trillion total resources which was 6.4 percent higher than last year’s P968 billion. As for the rural and cooperative banks, as of end-2022, they reported total resources of P403 billion compared to P359 billion last year, or an increase of 12.25 percent. Meanwhile, BSP numbers showed that NBFIs’ total resources as of end-March slightly declined to P4.93 trillion from P4.94 trillion same period last year. The BSP in its latest report on the financial system said banks and non-banks continued to remain strong amid the lingering uncertainties in the global financial system post-Covid. The BSP has noted that Philippine banks have sustained growth momentum in assets, deposits, and profit, as well as maintained adequate capital and liquidity buffers. The banks’ asset growth, funded mainly by deposits, and improved credit are all supportive of economic growth. To make sure there is stability of banks’ funding source, the BSP said the banking system has kept its strong capital position as cushion against shocks. Last year, total capital stood at P2.7 trillion, up 5.1 percent year-on-year. In terms of risk-based capital, the industry’s capital adequacy ratios (CARs) was at 15.7 percent on a solo basis and 16.3 percent on a consolidated basis as of end-2022. These are still well-above the BSP minimum of 10 percent. The BSP said banks’ risk-taking activities are backed by adequate capital such as common equity and retained earnings.