MANILA: The resources of the Philippine financial sector grew by 9.20 percent by the end of August this year, according to the latest data from the Bangko Sentral ng Pilipinas (BSP).
According to Philippines News Agency, preliminary data released by the BSP on Tuesday revealed that the total resources of banks and non-bank financial institutions reached PHP32.14 trillion in August, marking an increase from PHP29.43 trillion in the same month of the previous year. Specifically, resources of banks rose significantly, with the total reaching PHP26.80 trillion, up from PHP24.23 trillion last year.
The breakdown shows that resources of universal and commercial banks climbed to PHP25.08 trillion from PHP22.68 trillion, while resources of thrift banks also increased to PHP1.13 trillion. Meanwhile, digital banks reported resources amounting to PHP110.3 billion, and rural and cooperative banks saw their resources reach PHP478.9 billion.
The total resources of non-banks also saw an increase, reaching PHP5.3 trillion
from PHP5.1 trillion in August last year. This category includes a variety of institutions such as BSP-supervised investment houses, financing companies, investment companies, securities dealers or brokers, pawnshops, lending investors, non-stock savings and loan associations, credit card companies, government non-bank financial institutions, and authorized agent banks and forex corporations.
Rizal Commercial Banking Corporation chief economist Michael Ricafort attributed the growth in the country’s financial sector resources to a similar increase in banks’ loans which aligns with the continued growth in banks’ deposits as the economy recovers further from the pandemic. He highlighted that the growth in banks’ total resources is nearly twice the country’s GDP growth, which was recorded at 6.2 percent in the third quarter.
Ricafort also noted that future cuts in Federal and local policy rates could further enhance the growth in loans amid increased business and other economic activities, potentially boosting
other major sources of banks’ income such as trading gains and fees. Additionally, the BSP’s recent decision to reduce banks’ reserve requirement ratio is expected to be another growth driver for banks’ loans, earnings, and total resources.