THE TOTAL RESOURCES of the Philippine financial system climbed by 6.3% year on year in the first eight months, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
Resources held by banks and nonbank financial institutions rose to P34.577 trillion in the January-to-August period from P32.513 trillion the prior year.
However, it dipped by 0.04% from the P34.592 trillion recorded as of end-July.
These resources include funds and assets such as deposits, capital, and bonds or debt securities.
Based on preliminary central bank data, banks’ resources increased by 6.6% to P28.586 trillion as of end-August from P26.809 trillion a year ago.
Broken down, resources held by universal and commercial banks went up by 6.2% to P26.632 trillion at end-August from P25.087 trillion last year.
Thrift banks’ resources likewise jumped by 21.8% year on year to P1.38 trillion at end-August from P1.133 trillion a year ago.
On the other hand, resources of rural and cooperative banks went down by 11.3% to P424.9 billion in the eight months to August from P478.9 billion in the comparable year-ago period.
Resources of digital banks increased by 35.1% to P149 billion from P110.3 billion a year ago.
Meanwhile, the latest available data showed nonbank financial institutions’ (NBFI) resources rose by 5% to P5.991 billion as of end-March from P5.704 billion seen at end-August last year. There were no data for NBFIs as of end-August this year.
Nonbanks include investment houses, finance companies, security dealers, pawnshops, and lending companies.
Institutions such as nonstock savings and loan associations, credit card companies, private insurance firms, the Social Security System, and the Government Service Insurance System are also considered NBFIs.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the higher resources in August to the double-digit growth in bank lending, particularly consumer loans.
BSP data showed bank lending grew by 11.2% year on year to P13.62 trillion in August. This was the slowest growth since the 11.1% posted in November 2024.
“However, the slight month-on-month decline could be attributed to weather-related disruptions after the series of storms that reduced business days, thereby reducing banking and other economic transactions,” Mr. Ricafort said in a Viber message.
He noted that further easing by the BSP and the US Federal Reserve could boost the financial system’s resources in the coming months.
The central bank last week unexpectedly trimmed its benchmark interest rate by 25 basis points (bps) to 4.75%, the lowest in three years.
The Monetary Board has now reduced borrowing costs by a total of 175 bps since August last year.
BSP Governor Eli M. Remolona, Jr. said one more cut is possible at their last meeting in December. He also left the door open for policy easing next year as he sees the neutral nominal policy rate to be closer to 4% than their earlier projection of 5%.
Meanwhile, the US Federal Reserve is expected to deliver two more cuts until yearend following its first 25-bp reduction this year in September, which brought its policy rate to 4-4.25%. — Katherine K. Chan