In the first half of the year, Philippine banks increased their investments by 9.2 percent to reach a total of P6.6 trillion, contributing to the robust growth of the financial system, marked by stability, profitability, and ample capital and liquidity, as reported in the Bangko Sentral ng Pilipinas (BSP) Report on the Philippine Financial System for the First Semester of 2023.
The majority of these investments, approximately 60 percent or P4 trillion, were in debt securities measured at amortized cost, while an additional 34.3 percent or P2.3 trillion were in securities measured at fair value through other comprehensive income (FVOCI).
The BSP noted that despite the strong growth in investments, the rate of growth was slower compared to the previous year.
Furthermore, the banking sector also exhibited growth in lending and deposits, with total deposits increasing 8.1 percent year-on-year to P17.8 trillion as of end-June.
These deposits, particularly peso-denominated ones, provided insulation to the banking system against potential funding withdrawals due to global financial market developments.
Overall, the banking sector remains resilient and stable, with strong balance sheets, profitable operations, and adherence to regulatory and supervisory reforms, as per BSP Governor Eli M. Remolona Jr.
The assets of Philippine banks, totaling P23.3 trillion at the end of the first half, increased by 9.1 percent year-on-year, with a significant portion allocated to loans primarily financed by deposits.
Universal and commercial banks held the largest share of assets at 93.9 percent, while bank loans reached P12.7 trillion, an 8.8 percent increase from the same period in 2022, reflecting broad-based lending support for key productive sectors, including households.
