The banking system’s total assets went up by 6.93 percent to P22.83 trillion in the first six months of 2023 from P21.35 trillion same time last year as deposits, loans and investments continued to expand.

Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona has credited Philippine banks’ resiliency and strong position as one of the factors why the local economy was able to gradually rebound post-pandemic.

Based on BSP data, banks’ continued strong performance can be seen in its sustained expansion in assets, deposits, and profit, as well as stable capital, liquidity buffers and ample provision for credit losses.

“One thing that has helped is the resilience of our banking system (and our) banks have remained liquid. This way, they have been supportive of our recovery from the pandemic. In the past, when we had a crisis, the banks had to repair their balance sheets. They were part of the problem rather than part of the solution. This time, they have been part of the solution rather than part of the problem,” said Remolona. He has said the same thing in recent economic briefings and a congressional budget hearing.

Banks' assets are mainly funded by its core business of deposits, as well as loans and investments. 

Meanwhile, the banking system’s liabilities which are financial and deposit liabilities, also increased by 6.83 percent to P20.05 trillion from P18.77 trillion same time in 2022.

Under total assets, banks’ net loans inclusive of interbank loans receivable and reverse repurchase grew by 6.63 percent to P12.06 trillion from P11.31 trillion. Net loans have a big contribution to total assets after investments and cash and due from banks.

Net investments which are financial assets and equity investments, rose by 8.41 percent to P6.69 trillion from P6.17 trillion in 2022.

Cash and due from bank continued to decline to P2.76 trillion or down by 3.16 percent from P2.85 trillion.

As for net real and other properties acquired or ROPA, this was lower by 7.77 percent to P91.92 billion from P99.67 billion last year.

By banking group, the 45 big banks or universal and commercial banks accounted for about 94 percent of total industry assets at P21.88 trillion of the total as of end-July this year.

Meanwhile, the 43 thrift banks’ assets reached P947.24 billion during the period. The rural and cooperative banks are delayed in reporting but as of end-March 2023, the total assets amounted to P367.30 billion. There are 395 rural and cooperative banks, of which 373 are rural banks.

As of end-June, banks’ cumulative net profits stood at P178.50 billion, up 24.72 percent from same period in 2022 of P143.12 billion. The combined industry net interest income rose 16.97 percent to P414.45 billion from P354.32 billion while non-interest income dropped 7.74 percent to P107.94 billion versus P117 billion previously.

Based on BSP data, in terms of assets, the SM Group’s BDO Unibank Inc. is the country’s biggest bank with total assets of P3.92 trillion as of end-March this year.

Government-owned Land Bank of the Philippines is second largest lender with total assets of P3.11 trillion followed by the Ayala-led Bank of the Philippine Islands with P2.66 trillion.

The Ty-controlled Metropolitan Bank and Trust Co. with total assets of P2.62 trillion as of end-March is in fourth slot while China Banking Corp., a sister company of BDO, has P1.36 trillion.

The other banks in the top 10 in terms of asset size are Rizal Commercial Banking Corp., Philippine National Bank, state-owned Development Bank of the Philippines, Union Bank of the Philippines and Security Bank Corp.

The banking system is the core of the financial system. As the economy slowly recovers, the BSP expects all key indicators of banks will improve this year and “move closer to pre-pandemic levels (to) support domestic recovery.”