The Bangko Sentral ng Pilipinas main office in Manila.

THE TOTAL RESOURCES of the Philippines’ financial system further rose at end-July, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Resources of banks and nonbank financial institutions increased by 6.7% to P28.796 trillion in the first seven months of the year, from P27 trillion in the same period in 2022.

However, the growth in total resources is slower than the 7.7% recorded a month ago.

These financial resources are held by banks and nonbank financial institutions. These include funds and assets such as deposits, capital, as well as bonds or debt securities.

“The growth in the total assets/resources in the financial system and of banks is similar to the growth in loans; but still faster/better than the economic growth as consistently seen in recent years,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Earlier BSP data showed outstanding loans of big banks grew by 7.7% to P11 trillion in July from P10.21 trillion a year ago. This was slower than the 7.8% seen in June.

“The sustained growth in bank loans may also be attributed and consistent with the continued growth in deposits, as supported by the economic reopening narrative,” Mr. Ricafort said.

He said the sustained growth in the net income of banks has contributed to the increase in the financial system’s total resources. 

The Philippine banking system’s combined net profit climbed by 27.7% to P182.764 billion in the first half of the year, from P143.122 billion in the same period in 2022, separate BSP data showed.

“However, the slower growth in the total assets/resources of banks and nonbanks could be partly attributed to higher prices/inflation and higher interest rates,” he said.

To tame inflation, the Monetary Board hiked borrowing costs by 425 basis points from May 2022 to March 2023.

Based on data from the BSP, banking resources rose by 7.5% to P23.763 trillion at end-July from P22.095 trillion a year prior. Banks include universal and commercial banks, thrift banks, as well as rural and cooperative banks.

Broken down, the total banking resources held by universal and commercial banks stood at P22.338 trillion as of end-July, up by 7.5% from P20.775 trillion a year ago.

Thrift banks held P1.018 trillion of total resources, increasing by 7.7% from P945 billion a year ago.

The total resources of rural and cooperative banks climbed by 8.8% to P408 billion as of end-July from just P375 billion in the same period in 2022.

Meanwhile, the resources of nonbanking financial institutions inched up by 2.6% to P5.033 trillion from P4.906 trillion as of end-July 2022.

Nonbank financial institutions include investment houses, finance companies, security dealers, pawnshops and lending companies. 

Institutions such as nonstock savings and loan associations, credit card companies, private insurance firms, the Social Security System and the Government Service Insurance System are also considered nonbanks.

The financial system’s total resources stood at P28.806 trillion in 2022, up by 9.3% from a year prior. — Keisha B. Ta-asan