“The Philippine banking system is strong, stable, resilient, and responsive to the evolving needs of the country’s growing economy.”
This was the assessment made by Felipe M. Medalla, governor of the Bangko Sentral ng Pilipinas (BSP), when he spoke during the annual gathering of the country’s financial experts and government leaders at the BSP’s head office in Manila last February 24.
With the theme, “A Future-Ready Philippines: Digital, Sustainable, Inclusive,” the annual gathering was attended by top leaders of the BSP and the banking community, several government officials, diplomats, and journalists.
“Our banking system sustained its solid footing as shown in the continued growth in its assets, deposits, and profits, as well as ample capital, liquidity buffers, and loan loss reserves,” the central bank chief said.
During the event, Medalla also underscored the BSP’s steadfast commitment to championing financial inclusion and digitalization of the banking sector to build a technologically-advanced, environmentally-responsible, and financially-inclusive economy.
PH banks’ assets grew as economic activity picked up in 2022
In a major business newspaper’s latest quarterly banking report, it was revealed that the assets of the Philippines’ largest banks grew by nearly 10% in the fourth quarter of 2022.
The report said that as the country’s economic activity continued to pick up, the combined assets of 45 universal and commercial banks in the Philippines jumped by 9.4% to P22.51 trillion in the October-to-December period, up from P20.56 trillion in the same period last year.
Asset growth also quickened from the 8.38% year-on-year expansion in the third quarter of 2022 and the 8.59% in the same period in 2021.
Aggregate loans of big banks expanded by 9.73% year on year to P11.14 trillion in the October-December period, faster than the 5.93% growth in the same period in 2021.
However, it was nearly unchanged from the 9.74% growth in the third quarter.
The fourth quarter also saw nonperforming loans (NPLs) drop by 9.45% year on year to P336.54 billion from P371.65 billion in the fourth quarter of 2021.
This brought the NPL ratio, or the bad loans as a portion of the total loan portfolio, to 3.17% in the fourth quarter, higher than the NPL ratio of 2.91% in the third quarter of 2022.
Year on year, the NPL ratio was an improvement from the 3.95% recorded in the same quarter 2 years ago, reflecting the Filipinos’ increased capacity to repay their loans.