The total assets of the local banking system grew by 12.24 percent to P25.932 trillion as of end-July compared to same period last year of P23.104 trillion, supported by stable deposits, loans and investments.
The asset growth enables Philippine banks to improve their lending and investing activities. Based on data from the Bangko Sentral ng Pilipinas (BSP), loans and investments accounted for about 83 percent of the banking total assets as of end-July.
Total assets refer to banks’ total resources and includes cash and due from banks; total loan portfolio; total investments; real and other properties acquired (ROPA); and other assets held by financial institutions.
Meanwhile, the banking system’s total liabilities as of end-July increased by 12.53 percent to P22.713 trillion compared to P20.183 trillion in 2023. Banks’ liabilities are its financial obligations such as the sum of its financial liabilities held for trading; financial liabilities designated at fair value through profit or loss; deposit liabilities; due to other banks; bills payable; unsecured subordinated debt; bonds payable; redeemable preferred shares; derivatives with negative fair value held for hedging; finance lease payment payable; and other liabilities.
With the banking system’s assets about to hit P26 trillion, the latest data showed that net loans as of end-July went up by 10.95 percent to P13.728 trillion from P12.373 trillion same time last year. Net loans are inclusive of interbank loans receivable and reverse repurchase.
Banks’ net investments also increased by 12.53 percent to P7.689 trillion versus P6.833 trillion in 2023. Net investments are financial assets and equity investments.
As for cash and due from banks or cash on hand and banks’ receivables among others, this had a minimal increase of one percent to P2.457 trillion from P2.482 trillion last year.
Banks’ net ROPA, on the other hand, increased by 4.04 percent to P110.105 billion from P105.828 billion in July of 2023. ROPA is described as “other than those used for banking purposes or held for investment”. It is acquired by a bank to settle a loan from a borrower through foreclosure or dation in payment (dacion en pago), among other reasons.
By banking group, the 44 big banks or universal and commercial banks accounted for about 93.5 percent of total industry assets at P24.346 trillion as of end-July while its total liabilities stood at P21.387 trillion.
The 42 thrift banks reported assets of P1.046 trillion while its total liabilities amounted to P879.795 billion.
The six digital banks have total assets of P101.913 billion and liabilities of P88.044 billion.
The 364 rural banks and 22 cooperative banks have a one month lag period. As of end-June, the small banking sector contributed a combined P439.249 billion in total assets while liabilities amounted to P358.455 billion.
Based on BSP’s end-March data on banking assets’ ranking, the SM Group’s BDO Unibank Inc. remains the country’s biggest bank in terms of total assets at P4.375 trillion.
The second largest lender in terms of asset size is the Ty family’s Metropolitan Bank and Trust Co. with P3.271 trillion followed by government-controlled Land Bank of the Philippines with P3.268 trillion.
The Ayala-led Bank of the Philippine Islands is the country’s fourth biggest bank in terms of assets with P3.033 trillion while another Sy bank, China Banking Corp., is the fifth biggest lender with P1.627 trillion.
The other banks in the top 10 in terms of asset size are the Yuchengcos’ Rizal Commercial Banking Corp. with P1.284 trillion; Lucio Tan Group’s Philippine National Bank with P1.193 trillion; Security Bank Corp. with P1.069 trillion; Aboitiz-led Union Bank of the Philippines with P983.205 billion; and state-owned Development Bank of the Philippines with P974.928 billion.
Banks’ deposits has remained a reliable source of funds for bank operations at about 57 percent of the banking system’s total assets as of end-July.
As of end-March this year, the total peso-denominated deposits grew by 6.3 percent year-on-year to P14.7 trillion, based on BSP data. Other sources of funding includes bonds and bills payable.