Bank assets up at end-April

By Katherine K. Chan, Reporter

THE Philippine banking system remained strong as of April with banks’ assets expanding by 12% year on year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Banks’ assets climbed to P30.12 trillion at end-April from P26.893 trillion last year, according to BSP data posted on its website.

Month on month, however, this dropped by 0.71% from the all-time high of P30.336 trillion seen at end-March.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the month-on-month slip is less of a concern as the sector’s over P30 trillion in assets shows that it remains resilient.

“The slight dip in bank assets in April is more of a technical pullback than a concern — after the usual quarter-end buildup in March. Banks tend to rebalance as liquidity normalizes, government deposits are drawn down, and market valuations adjust,” he said in a Viber message.

“The bigger picture remains very constructive: a P30-trillion banking system, up 12% year on year, tells us liquidity is strong, credit is flowing, and the financial sector is actively supporting growth.”

Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP) net of allowances for credit losses.

Universal and commercial banks held most of the industry’s assets with P28.086 trillion as of April, up 11.69% from the P25.145 trillion a year ago.

Meanwhile, BSP data showed that the banking sector’s total net loan portfolio, inclusive of IBL and RRP, stood at P16.671 trillion as of April, growing by 12.3% from P14.845 trillion in the same period last year.

Net investments, or financial assets and equity investments in subsidiaries, climbed by 8.06% year on year to P8.677 trillion from P8.03 trillion, central bank data showed.

Banks’ net real and other properties acquired also went up by 19.27% to P142.98 billion in the four-month period from P119.877 billion a year earlier.

The industry’s other assets reached P2.433 trillion at end-April, jumping by 22.63% from the P1.984 trillion posted in the previous year.

Cash and due from banks likewise increased by 14.74% to P2.196 trillion from P1.914 trillion previously.

On the other hand, Philippine banks’ liabilities rose 13.16% year on year to P26.489 trillion as of April from P23.409 trillion.

Bulk of lenders’ liabilities during the period were deposits, which jumped by 11.59% to P22.062 trillion from P19.771 trillion last year.

Broken down, peso-denominated deposits reached P18.161 trillion, while foreign currency deposits amounted to P3.901 trillion.

Continued growth in bank lending and the eventual easing of inflation and rates will help boost the sector’s assets in the coming months, according to Mr. Ravelas.

“Looking ahead, we expect bank assets to continue expanding at a healthy pace, driven by lending to infrastructure, businesses, and consumers, especially as inflation eases and rates eventually come down,” he said. “Bottom line: short-term fluctuations are normal, but the trend is clearly upward — and that’s a good signal for the economy.”