Philippine financial system resources reach record PHP 38.3T as of June

Resources held in the Philippine financial system topped PHP 38 trillion, as it rose by nearly 9% to its highest ever as of June, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

The sector’s combined resources climbed by 8.91% to PHP 38.309 trillion at end-June from PHP 35.174 trillion a year ago.

Month on month, it went up by 1.78% from the previous all-time high of PHP 37.638 trillion.

The financial system’s resources include the funds and assets of banks and nonbank financial institutions (NBFIs) such as deposits, capital, and bonds or debt securities, but exclude those from the central bank.

Banks alone held the bulk or PHP 31.962 trillion of the industry’s resources, up 9.96% from the PHP 29.067 trillion logged a year prior.

Broken down, universal and commercial banks’ resources were 9.29% higher at PHP 29.652 trillion as of end-June from PHP 27.132 trillion last year.

Resources held by thrift banks also increased by 10.7% to PHP 1.515 trillion as of June from PHP 1.369 trillion a year ago.

Meanwhile, digital banks had PHP 208.4 billion in resources, surging by 46.66% annually from PHP 142.1 billion.

The latest available central bank data showed the resources of rural and cooperative banks stood at PHP 587 billion as of March, 8.06% more than P543.2 billion it held in the previous year.

On the other hand, nonbanks’ resources inched up by 7.26% year on year to PHP 6.347 trillion as of end-2025 from PHP 5.917 trillion. There was no data for nonbanks as of end-June this year.

NBFIs include investment houses, finance companies, security dealers, pawnshops and lending companies, nonstock savings and loan associations, credit card companies, private insurance firms, and authorized agent banks of foreign exchange corporations.

State-run institutions such as the Philippine Guarantee Corp., Small Business Corp., Social Security System, and Government Service Insurance System are also considered nonbank financial firms.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the increase in the industry’s financial resources mirrored the sustained expansion of banks’ assets and lending.

“This could be largely attributed to the continued growth in banks’ total assets, especially driven by banks’ loan growth consistently near +10% in recent months amid some hedging activities before prices and interest rates or borrowing costs go up further,” he said in a Viber message.

At end-June, the banking sector’s combined assets grew by 10.34% year on year to a fresh-high of PHP 31.128 trillion from PHP 28.211 trillion.

Meanwhile, big banks extended a total of PHP 14.882 trillion in loans, up by an annual 9.8% from PHP 13.553 trillion.

“For the coming months, developments in the Middle East would determine global crude oil prices, inflation, and interest rates that, in turn, would determine the trend in banks’ loans, deposits, and earnings,” Mr. Ricafort noted.

The central bank has so far lifted its key interest rate by 50 basis points (bps) to 4.75% since the start of the Middle East war, with monetary authorities maintaining a hawkish stance amid heated inflation. 

However, BSP Governor Eli M. Remolona, Jr. on Friday said the weaker second-quarter growth may prompt them to be less aggressive in tightening, although the lack of sustained disinflation leaves them in a cautiously hawkish position.

He noted that the latest growth print was “quite disappointing” after slumping to a new post-pandemic low of 2.3% amid sluggish investments and muted household spending due to rising prices.

Inflation has been above the BSP’s 3% target for five straight months but eased for a third straight month to average 5% as of July. The BSP expects inflation to hit 6.4% by yearend.

The Monetary Board will have its fourth rate-setting meeting this year on Aug. 27. — Katherine K. Chan