Bank assets grow to record P23.7 trillion

MANILA, Philippines — Philippine banks booked a double-digit growth in assets last year as the country’s economy continues to recover from the impact of the COVID-19 pandemic, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Data from the central bank showed the total resources of the banking sector grew by 10.5 percent to a record P23.7 trillion in 2022.

This was fueled by the 12.8 percent growth in the assets of universal and commercial banks to P22.29 trillion.

Big banks accounted for 94.1 percent of the banking industry’s total resources last year.

This was enough to offset the 23.9 percent drop in the total assets of thrift banks to P1.02 trillion last year from P1.34 trillion in 2021.

The decline in the assets of mid-sized banks could be attributed to the continued consolidation of the thrift banking arms with their parent big banks as well as the closure of some problematic banks.

On the other hand, the assets of rural and cooperative banks also went up by 14.4 percent to P390 billion as of end-September last year from P341 billion.

BSP Governor Felipe Medalla earlier said the regulation of banks has been very straightforward as institutions that carry more risks are required to set aside more capital.

“That policy has been very rewarding because, as the crisis came, our banks remained healthy and up during the pandemic. The banks’ lending recovered very strongly. Banks, now, have growing balance sheets, which, at the moment, do not show any form of weakness,” Medalla said.

Furthermore, the BSP chief said that some of the current bankers still remember the 1997 Asian financial crisis.

“The banks themselves are very well-governed, except for some that are already closed, which are mostly smaller ones that are not adequately capitalized. By the way, that (bank closures)w was quite unpopular, but we had to do it,” Medalla said.

Earnings of Philippine banks jumped by 37.5 to hit an all-time high of P309 billion last year from P224.75 billion last year on the back of higher interest income amid the aggressive rate hikes by the BSP and higher trading gains.

This erased the previous record high of P230.67 billion booked before the global health crisis in 2019.

The banking sector is dominated by family-owned conglomerates led by Sy-led BDO Unibank, Ayala-led Bank of the Philippine Islands, Ty-led Metropolitan Bank & Trust Co., Sy-led China Banking Corp., Lucio Tan’s Philippine National Bank, Yuchengco-owned Rizal Commercial Banking Corp., and Aboitiz-led Union Bank of the Philippines.