Bank assets rise to P30.7 trillion in July

MANILA, Philippines — Philippine banks’ total assets expanded by 10.7 percent to P30.72 trillion in July from a year earlier, supported by sustained lending and deposit growth, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Total assets, which include banks’ loans, investments, cash and other holdings, increased from P27.74 trillion in July last year. The annual expansion reflected a larger stock of loans and investments held by banks, alongside growth in the deposits that help fund their operations.

Banks’ total loan portfolio, including lending to other banks and short-term placements backed by securities, grew by 10.8 percent to P16.91 trillion in July from P15.26 trillion a year earlier.

RCBC chief economist Michael Ricafort said the annual asset expansion was consistent with bank loan growth of around 10 percent, with consumer borrowing rising faster as some buyers brought purchases forward.

He attributed this partly to efforts to buy goods “before prices and interest rates go up further” amid the war involving Iran and the broader Middle East conflict.

Ricafort said higher inflation linked to the conflict had also reduced purchasing power and the income available for spending, increasing demand for loans.

Meanwhile, banks’ investments stood at P8.91 trillion in July, up by eight percent from P8.24 trillion a year earlier. On the funding side, deposits grew by 7.9 percent to P22.06 trillion from P20.44 trillion a year earlier.

Ricafort linked recent deposit growth partly to greater public confidence after the Philippine Deposit Insurance Corp. doubled insurance coverage to P1 million per depositor per bank.

He said reductions in banks’ reserve requirement ratio since the latter part of 2024 had also increased funds available for lending. The ratio determines the share of deposits banks must keep in reserve.

Banks’ total capital reached P3.65 trillion, up by 3.8 percent from P3.52 trillion a year earlier. Ricafort said continued profitability had helped build banks’ capital and assets.

Looking ahead, he said higher global and domestic interest rates associated with geopolitical tensions could weigh on banks’ earnings and asset growth.

Ricafort also flagged higher nonperforming loans, or loans borrowers are failing to repay as agreed, as another potential drag.