The country’s financial system resources are expected to breach P32 trillion by the second half of 2024 amid steady growth in bank loans and in anticipation of lower borrowing rates by the third quarter.
Total resources held by both banks and non-banking financial institutions (NBFIs) already total P31.672 trillion as of end-March this year, based on the latest Bangko Sentral ng Pilipinas (BSP) data. This was 9.07 percent higher compared to same period last year of P29.038 trillion.
Financial system resources are funds and assets in the form of deposits, capital, and bonds or debt securities.
By banking group, the big banks or the universal and commercial banks accounted for bulk or about 94 percent of total resources. As of end-March, banks accounted for P26.442 trillion of total resources, up by 10.69 percent from P23.887 trillion in 2023.
The country’s 44 big banks have the largest share of the funds and assets at P24.778 trillion or 10.63 percent higher compared to P22.397 trillion in 2023.
Meanwhile, the 42 thrift banks supervised by the BSP accounted for P1.116 trillion of the total, 8.87 percent higher than same time last year of P1.035 trillion.
The 365 rural banks and 22 cooperative banks held P446 billion of total resources based on an end-December 2023 data, up 10.49 percent from P404 billion in 2023.
Similar with rural and cooperative banks, the BSP also takes its time in reporting NBFIs’ resources. As of end-December 2023, NBFIs accounted for P5.230 trillion of total resources, up 1.53 percent versus P5.151 trillion in 2023.
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.
As of end-April 2024, data from the BSP showed there are 1,320 NBFIs without quasi-banking function. These are 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.
The BSP said the banking sector as the core of the financial system continues to be resilient and stable with a strong balance sheet, profitable operations, sufficient capital and liquidity buffers, as well as ample provision for probable losses.
It added that with adequate resources, deposits and earnings, Philippine banks remain well capitalized and highly liquid, with a capital adequacy ratio and key liquidity ratios exceeding the BSP regulatory and international standards.
Last year, the country’s total financial system resources reached P31.187 trillion. This was higher compared to 2022’s P28.864 trillion and P26.357 trillion in 2021.