The outlook for the Philippine banking sector over the next two years remains positive, despite prevailing macroeconomic challenges, according to the 2023 Banking Sector Outlook Survey (BSOS) released on Thursday.
The survey, conducted by the Bangko Sentral ng Pilipinas (BSP), collected responses from 147 out of 173 banks, representing 97.7% of the total assets in the country’s banking system as of December 2023.
The respondent banks expect double-digit growth across key metrics, including assets, loans, deposits, and net income.
Additionally, banks plan to uphold strong capital and liquidity positions to ensure institutional stability.
Survey results showed that 64.6% of the banks anticipate a stable banking system in the coming years, while 34.7% project an even stronger sector.
Notably, 70.1% of respondents expect double-digit growth in their asset portfolios.
There are signs of improved expectations regarding the quality of loan portfolios, with a decrease in the proportion of banks forecasting a non-performing loan (NPL) ratio exceeding 5%—down to 48.7% from 52.4% in 2022.
Foreign and universal banks show particular optimism, with many foreign banks projecting NPL ratios below 1%, while universal and commercial banks expect ratios between 1% and 5%.
Conversely, smaller banks—including thrift, rural, and cooperative institutions—express more pessimism, with many anticipating NPL ratios above 5%.
Most respondent banks plan to maintain a high NPL coverage ratio to adequately cover potential losses.
The BSP noted that restructured loans are expected to account for 2% of total loans among the surveyed banks.
