The Philippine banking industry has reached an all-time high in terms of assets, according to data from the central bank. As of end-May, total assets held by domestic banks stood at P30.442 trillion, a 11.69% increase from P27.257 trillion in the same period last year.
This marks a new record for the banking sector, exceeding the previous high of P30.336 trillion in total assets logged at the end of March. On a month-on-month basis, the sector's assets edged up by 1.07% from P30.12 trillion posted at end-April.
Experts attribute the growth to recovering economic conditions and steady demand, which allowed domestic banks to expand their balance sheets during the period. "The record-high level of bank assets as of end-May reflects the continued expansion of economic activity and financial intermediation in the country," said a leading economist.
The banking sector's total net loan portfolio, inclusive of interbank loans receivable and reverse repurchase agreements, increased by 12.07% year on year to P16.946 trillion from P15.121 trillion. Net investments also rose by 8.61% to P8.641 trillion, while banks' net real and other properties acquired increased by 18.79% to P143.804 billion.
The industry's other assets jumped by 20.11% to P2.497 trillion at end-May from P2.079 trillion in the previous year. Cash and due from banks grew by 11.83% to P2.215 trillion at end-May from P1.98 trillion in the comparable year-ago period.
Universal and commercial banks held most of the sector's assets, with P28.384 trillion at end-May. This was followed by thrift banks, which had P1.404 trillion in assets, and digital banks with a total of P195.593 billion.
The banking sector's total liabilities reached P26.854 trillion as of the end of May, rising by 12.89% from P23.787 trillion last year. Of this amount, around 83% were deposits, which climbed by 11.19% year on year to P22.306 trillion from P20.061 trillion previously.
Experts predict that banks' assets will continue to grow as monetary conditions ease, supported by ample liquidity in the financial system and steady loan demand. However, renewed financial market volatility triggered by global conflicts could weigh on the banking industry's asset growth.
The impact of global geopolitical risks on local inflation, interest rates, and market sentiment will likely shape banks' balance sheets in the coming months. For now, domestic economic fundamentals remain supportive of balance sheet growth, said the economist.
