Local banking system’s total assets surged to a record ₱29.83 trillion at end-December last year, driven by the resurgence in credit demand and stable funding conditions that enabled lenders to expand their balance sheets.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that the industry-wide asset base climbed 8.8 percent from ₱27.43 trillion a year earlier.

Banks’ assets are primarily supported by deposits, loans, and investments, including cash, balances due from other banks, interbank loans receivable (IBL), and reverse repurchase (RRP) agreements, net of credit loss provisions.

Since January 2025, the banking sector’s total loan portfolio, inclusive of IBL and RRP, increased by 11.8 percent to ₱16.59 trillion from ₱14.84 trillion in the same period a year earlier.

Net investments, which include financial assets and equity holdings in subsidiaries, increased by 10.4 percent to ₱8.58 trillion as of end-December from ₱7.77 trillion a year earlier.

Net real and other properties acquired (ROPA) jumped by 21.4 percent year-on-year to ₱138.1 billion from ₱113.7 billion last year.

Meanwhile, cash and balances due from banks declined by 19.5 percent to ₱2.21 trillion as of end-December from ₱2.74 trillion a year earlier.

Other assets of the banking industry increased by 17.9 percent to ₱2.31 trillion in December 2025 from ₱1.96 trillion in the same month last year.

Meanwhile, the total liabilities of the banking system reached ₱26.16 trillion during the period, up 8.7 percent from ₱24.06 trillion a year earlier.

Deposits accounted for the bulk, or 83.6 percent, of banks’ liabilities, rising 7.3 percent to ₱21.86 trillion as of end-December from ₱20.37 trillion a year earlier.

Of the total deposits, peso-denominated accounts amounted to ₱18.20 trillion, while foreign currency deposits reached ₱3.67 trillion.

Robert Dan J. Roces, group economist at SM Investments Corp., said the record-high assets were supported by steady domestic demand, easing inflation, and stable funding conditions.

“Loan demand improved as borrowing costs stabilized, while banks also increased investments in higher-yielding securities. Strong deposits, remittances, and sound capital buffers gave banks room to expand their balance sheets without taking on excessive risk,” said Roces.