The total funds and assets held by the Philippines’ financial institutions eased from a record-high level in July. However, the resources remain adequate to support the financing needs of a developing economy.
Excluding the central bank’s funds and assets, the country’s financial system held P38.1 trillion in total resources, data from the Bangko Sentral ng Pilipinas (BSP) showed.
That was nearly 1 percent lower than the record-high P38.4 trillion posted in June. But compared with a year ago, the amount grew by nearly 10 percent.
The total reflects the financial sector’s available resources, including cash, loans, deposits, capital and investment securities, as well as reserves that regulated institutions maintain to absorb potential losses and safeguard financial stability.
The current level suggests banks remain well-positioned to meet the financing needs of households and businesses, supporting an economy that continues to navigate risks from geopolitical tensions abroad.
“The slight decline in total financial system resources in July was likely driven by normal balance sheet adjustments among large banks, including slower deposit growth, loan repayments and changes in investment holdings,” Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said, adding that depositors may have used their own cash to support their businesses rather than borrow amid rising interest rates.
“It appears more of a temporary correction than a sign of weakness,” Ravelas added.
Figures showed banks continued to corner most of the domestic financial system’s resources, holding over 83 percent of the pile.
Total funds and assets held by banks amounted to P31.7 trillion as of July, up by 11 percent from a year earlier.
Broken down, big lenders’ resources rose 10 percent to P29 trillion, while thrift banks posted 7 percent growth to P1.5 trillion.
Digital banks’ resources surged by over 50 percent to P213.6 billion. Funds and assets of rural and cooperative banks grew by 47 percent to P623.9 billion.
Lastly, resources of nonbank financial institutions like investment houses, pawnshops, insurance companies, and state-run pension funds edged up by 5 percent to P6.4 trillion. (Ian Nicolas P. Cigaral © Philippine Daily Inquirer)
