PHL financial system continues to expand on big banks’ growth
THE PHILIPPINE financial system kept growing as of the third quarter, led by the rapid expansion of big banks that surged by a tenth in value from a year ago, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Total resources of the local financial system hit P16.197 trillion as of end- September, rising by 9.6% from the P14.779 trillion posted during the same period in 2015. It also posted steady growth coming from a P15.947-trillion tally logged in August.
The banking sector led the expansion that month as it held P13.099 trillion in funds and assets, 10.4% higher than the P11.863 trillion recorded in September 2015. Broken down, universal and commercial banks grew their resources to P11.804 trillion, 10.6% above the P10.671 trillion it had a year ago.
Thrift banks, which are focused more on retail and individual consumers, also expanded as of the third quarter as they held P1.072 trillion in resources as of September, up by 9.4% from last year’s P979.6-billion stash.
On the other hand, rural lenders also continued growing despite several closures mandated by the BSP among problem banks. Total resources of rural banks reached P223.4 billion, up by about 5% from P212.8 billion previously.
The Monetary Board had ordered the closure of 14 rural lenders as of end- September after these were found unfit to remain in business. The number has grown to a total of 20 banks closed as of Nov. 18.
Bank also expanded their lending activities in September to post a 17.7% growth total credits from a year ago, based on BSP data. Bulk of the loans went to production activities, against a 21.7% rise in total household credit.
Total deposits have also shown steady growth according to central bank data, with funds held by Philippine banks reaching P9.653 trillion and the number of accounts logging a fresh high at 52.398 million.
Meanwhile, non-bank entities offering financial services also expanded during the period, with total resources increasing by 6.2% to P3.098 trillion from P2.916 trillion as of September 2015.
Pawnshops remain the biggest among nonbank players with the widest reach across the country.
Central bank officials have said they are looking to tighten its grip on non-bank firms in order to fortify its watch versus dirty money deals.