Bank resources grow 12.56 percent in April

The country’s banking system raised its total resources to R14.142 trillion as of end-April, 12.56 percent higher year-onyear from R12.563 trillion, according to data from the Bangko Sentral ng Pilipinas (BSP).

Banks’ increasing capital and assets’ reserves boost total industry resources.

More than 90 percent of resources in the banking sector are controlled by the 42 big banks which as of end-April had R12.760 trillion of the total. This is 13.14 percent more compared to the same period in 2016 of R11.278 trillion.

Thrift banks have total resources amounting to R1.150 trillion which was higher than the previous year’s R1.06 trillion. The central bank’s data on the total resources of the financial system were gathered from banks’ submissions of consolidated statement of condition.

BSP data show that including nonbanks, the entire financial system’s total resources amounted to R17.364 trillion, up 10.10 percent compared to the previous year’s R15.771 trillion. The BSP’s data on the smaller rural banks and non-banks are not as up-to-date as the big banks and thrift banks.

The latest data was still end-December 2016, which was R231.7 billion for rural banks while the total non-bank resources (investment houses, finance companies, investment firms, pawnshops and securities dealers/brokers) stood at R3.223 trillion as of end-2016.

The BSP currently supervises and monitors 42 universal and commercial banks and 59 thrift banks as the first quarter this year. There are 470 rural and 28 cooperative banks also under BSP’s watch. In terms of total assets, the five largest banks in the Philippines are BDO Unibank, Inc., Metropolitan Bank and Trust Co., Bank of the Philippine Islands, Land Bank of the Philippines and Philippine National Bank.

At the end of 2016, the central bank is regulating nine non-bank financial institutions with quasi-banking functions and 5,540 non-banks without quasi-banking functions, of which 5,401 are pawnshops.

Last month, the BSP and the World Bank’s International Finance Corp. (IFC) agreed to work together to enhance the banking system’s risk management and good governance tools, generally improving the “environmental, social and corporate governance” (ESG) of local banks. The memorandum of agreement was signed last May 26. BSP Governor Amando M. Tetangco Jr. said ESG and good corporate governance allow banks and the markets overall to have “better management decisions,” more transparency, and to “proportionately address various financial and non-financial risks.”

This would improve the local banking system’s core business and further strengthened the resources base.

Corporate governance is the foundation of a “safe, sound and efficient financial system.” The BSP said its “fitness and propriety” rule for all banks’ board and senior officers adhere to these principles as a start.