MANILA, Philippines - The total assets of banks operating in the Philippines went up by 5.7 or P477 billion to P7.541 trillion in end-February from P7.064 trillion in the same period last year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
Universal and commercial banks accounted for 89.7 percent of the country’s total banking assets. Assets of universal and commercial banks rose 7.45 percent to P6.763 trillion from P6.294 trillion.
Statistics showed that the remaining 10.3 percent of the total resources was cornered by thrift and rural banks. Assets of these banks inched up by one percent to P778.25 billion from P770.52 billion
The BSP said the increase in the assets of banks operating in the Philippines could be traced to the rising deposit base of the industry due to the strong confidence of the Filipinos in the country’s banking system.
Last year, bank assets rose 5.7 percent to a new record level of P7.642 trillion from P7.23 trillion booked in 2010. Total assets of universal and commercial banks expanded by 6.4 percent to P6.833 trillion last year from P6.423 trillion in 2010 while that of thrift banks was steady at P623.58 billion.
In its Philippine Financial System report for the second quarter of 2011, the BSP said the Philippine financial system managed to secure a good spot as an audience to the dramatic unfolding of financial catastrophe now plaguing Europe from the Greek debt overhang which has been an offshoot of the US subprime crisis in 2008.
Multilateral lender International Monetary Fund (IMF) stated in its latest Global Financial Stability Report Market Update estimated that more than two-thirds of the €6.9 trillion European sovereign debt at end-2011 had credit default swap spreads past 200 basis points with Greece, Portugal, and Italy leading the cast with more than 400 basis points.
In contrast, the latest credit default spreads of the Association of Southeast Asian Nations (ASEAN-5) were all below 200 basis points with the Philippines at 155 basis points.
“Central to the Philippine story of fortitude and less internationally recognized resilience is a banking system that delivers consistent performance amidst any market conditions and more so, beyond expectations,” the BSP stated in the report.
It pointed out that banking industry’s total resources posted a compound annual growth rate of 7.1 percent over the past 15 years while asset quality ratios were at historic lows and have eased even from their pre-1997 Asian Financial crisis level of around four percent.
Solvency ratios were well-above regulatory and international standard that provided local lenders ample headroom to adjust to higher capital rules under Basel III by 2014.