ASSETS held by Philippine banks hit a record high as it topped P31 trillion by the end of the first half, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
The combined assets of the local banking sector were valued at P31.128 trillion as of end-June, up 10.34% from P28.211 trillion in the same period last year.
It also grew by 2.25% month on month, breaking the previous all-time high of P30.442 trillion seen at end-May.
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.
For analysts, the continued expansion of the industry’s loans, deposits, and investment holdings drove its assets to a fresh high despite a challenging macroeconomic backdrop.
“The latest record-high asset level reflects healthy loan growth, steady deposit inflows, and expanding investment holdings amid resilient domestic economic activity,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in a Viber message.
“While geopolitical tensions and higher oil prices remain key external risks, domestic liquidity conditions remain supportive; and credit demand continues to hold up,” he added.
BSP data showed the banking sector’s total net loan portfolio, inclusive of IBL and RRP, rose by 12.1% to P17.239 trillion as of June from P15.378 trillion in the comparable year-ago period.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., also attributed the sector’s asset growth to banks’ high earnings, which provided them more capital to fund loans and investments.
“This is again largely due and consistent with the… sustained net income despite a high base that added to banks’ capital, thereby leading to continued growth in banks’ total assets (and) resources by more than 10%,” he said via Viber.
BSP data showed banks’ net investments, or financial assets and equity investments in subsidiaries, grew by 8.41% to P9.089 trillion as of end-June from P8.384 trillion a year ago.
Net real and other properties acquired by banks also jumped by 24.27% to P160.784 billion as of end-June from P129.384 billion in the previous year.
The sector’s other assets jumped by 21.43% to P2.567 trillion as of end-June from P2.114 trillion last year.
Meanwhile, cash and due from banks fell by 6.07% annually to P2.071 trillion at end-June from P2.205 trillion previously.
At end-June, universal and commercial banks held most of the sector’s assets worth P29.044 trillion, up 10.02% from P26.4 trillion a year earlier.
Thrift banks’ assets also rose by 9.11% to P1.409 trillion at end-June from P1.291 trillion in the prior year.
The assets of rural and cooperative banks stood at P474.992 billion, increasing by 23.23% year on year from P385.446 billion.
Digital banks logged P199.859 billion in total assets, soaring by 48.22% from P134.836 billion recorded at end-June 2025.
On the other hand, the banking system’s liabilities rose 11.05% annually to P27.441 trillion as of June from P24.711 trillion.
Most of these were deposits, which climbed by 8.34% to P22.394 trillion from P20.671 trillion last year.
Peso-denominated deposits were valued at P18.52 trillion during the period, while foreign currency deposits amounted to P3.874 trillion.
For Mr. Ricafort, banks’ double-digit lending growth will continue to drive the rise in assets in the coming months.
The BSP earlier told BusinessWorld that lending activity may show muted growth this year amid rising borrowing costs and uncertainties over the Middle East war.
Mr. Asuncion also sees inflation, interest rates, and business sentiment shaping banks’ balance sheets throughout the rest of the year.
“We therefore expect banking sector assets to continue growing, although the pace may become more sensitive to developments affecting inflation, interest rates, and overall business sentiment,” he said.
The Monetary Board has so far raised the key policy rate by 50 basis points (bps) to 4.75%, with BSP Governor Eli M. Remolona, Jr. noting that the economy can still take another 25-bp hike.
Earlier this year, the central bank said geopolitical shocks from the ongoing Middle East war have minimal direct impact on the local banking system.
However, it also flagged potential asset quality risks in certain sectors from weaker domestic and external financial conditions. — Katherine K. Chan
