Financial system resources climb to P38 trillion

MANILA, Philippines — The total resources of the Philippine financial system rose by nearly 10 percent to P38.09 trillion in July, driven largely by the continued expansion of banks, data from the Bangko Sentral ng Pilipinas showed.

Total resources, which broadly represent the assets held by banks and non-bank financial institutions, increased by 9.8 percent from P34.71 trillion in July last year.

However, the July figure was 0.8 percent lower than the record-high P38.39 trillion posted in June.

Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the nearly double-digit year-on-year expansion showed that the financial system remained fundamentally strong and supported by continued economic activity, despite a slight pullback from the record level in June.

He said the month-on-month decline likely reflected normal balance sheet adjustments among large banks, including slower deposit growth as businesses drew down their balances instead of borrowing, loan repayments and changes in investment holdings.

“It appears more of a temporary correction than a sign of weakness,” Ravelas said, noting that total resources remained above P38 trillion.

Banks accounted for the bulk of the financial system’s resources at P31.7 trillion as of July, up by 10.8 percent from P28.6 trillion a year earlier. This represented about 83 percent of total financial system resources.

Universal and commercial banks, the country’s largest lenders, continued to dominate the banking industry with P29.35 trillion in resources. This was 10.1 percent higher than the P26.66 trillion recorded in July 2025.

Thrift banks posted resources of P1.52 trillion, rising by 10.6 percent from P1.37 trillion a year ago.

Digital banks continued to record the fastest growth among bank groups, with resources surging by 50.7 percent to P213.6 billion from P141.7 billion.

The BSP has been expanding the digital banking segment as part of efforts to widen access to formal financial services. The central bank recently approved a seventh digital bank license after earlier imposing a temporary cap on the number of digital banks operating in the country.

Meanwhile, rural and cooperative banks saw their combined resources jump by 46.8 percent to P623.9 billion from P424.9 billion in the same period last year.

Resources of non-bank financial institutions stood at P6.39 trillion, compared with P6.11 trillion in July 2025. However, the BSP noted that the 2026 figure for non-bank institutions was only available as of end-March.

Non-bank financial institutions covered by the data include BSP-supervised investment houses, financing firms, investment companies, securities dealers and brokers, pawnshops, lending investors and credit card companies.

The category also includes government non-bank financial institutions such as the Philippine Guarantee Corp. and Small Business Corp., as well as the Social Security System, Government Service Insurance System and private insurance companies.