The Philippine financial sector experienced a robust expansion, with total resources increasing by 9.20% to P32.14 trillion as of the end of August 2024, according to the Bangko Sentral ng Pilipinas (BSP).
This marks a significant rise from the P29.4 trillion reported during the same period last year.
Banks accounted for the bulk of this growth, amassing PHP 26.80 trillion in total resources, up from P24.23 trillion in August 2023.
Universal and commercial banks contributed P25.08 trillion, compared to P22.68 trillion a year earlier, while thrift banks reported resources of P1.13 trillion.
Digital banks also saw progress, with total resources reaching P110.3 billion, while rural and cooperative banks reported P478.9 billion.
The non-bank financial sector, which encompasses investment houses, financing companies, and other entities supervised by the BSP, saw total resources climb to P5.3 trillion from P5.1 trillion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, said that this growth in financial resources is reflective of rising loan demand and increasing bank deposits as the economy continues to recover from the pandemic.
Ricafort emphasized that further cuts in U.S. Federal Reserve and local interest rates could enhance loan growth amid rising economic activity, potentially boosting other income streams for banks, such as trading gains and service fees.
He said the BSP’s recent decision to reduce the reserve requirement ratio for banks would further support the expansion of loans and overall financial performance.
