MANILA, Philippines - Assets of Philippine banks continued to book a double-digit growth last year amid external challenges arising from the normalization of interest rates in the US, the decision of the United Kingdom to leave the European Union, and the slowdown in China.
Data released by the Bangko Sentral ng Pilipinas showed total resources of Philippine banks increased 12.4 percent to P13.58 trillion last year from P12.09 trillion in 2015.
The total resources of big banks or universal and commercial banks went up by 12.8 percent to P12.3 trillion from P10.9 billion, while that of mid-sized banks or thrift banks increased by 8.3 percent to P1.08 trillion from P995.18 billion.
The BSP said the Philippine banking system remains resilient as it continued to support long-term economic growth.
The continued rise in resources including deposits, profits, and retained earnings indicate that banks have the ability to service funding needs of corporate and household clients.
At the same time, this shows banks have enough to act as a buffer against any external shocks.
The research arm of the Fitch Group earlier said Philippine banks are expected to remain the strongest in the region on the back of robust macroeconomic fundamentals.
In its latest industry trend analysis titled “Risks Remain in China and India, Philippines Still Robust,” BMI Research said Philippine banks continued to stand out in the region.
“Within the region, we retain our long-held positive view on Philippines banks as underlying fundamentals remain robust,” BMI Research said.
The country’s gross domestic product (GDP) growth averaged 6.8 percent in 2016 despite slowing down to 6.6 percent in the fourth quarter from the revised seven percent in the third quarter.
This was well within the six to seven percent target set by economic managers of the Duterte administration.
“Philippine banks stand out in the region, and we maintain our constructive outlook as they are supported by a strong economic growth outlook, stable asset quality, and solid capitalization. Indeed, the archipelago is among the fastest growing economies in Asia,” it added.
For 2017, economic managers penned a GDP growth target of between 6.5 and 7.5 percent.
The research arm said the robust economic expansion would support the strong loan growth in the country.