Financial system resources climb to P38 trillion

The Philippine financial system's total resources climbed by nearly 10 percent to P38.09 trillion in July, the Bangko Sentral ng Pilipinas data revealed. This marked a 9.8 percent increase from P34.71 trillion in July 2025. However, the July figure marked a 0.8 percent decline compared to the June record of P38.39 trillion. Jonathan Ravelas, a senior adviser at Reyes Tacandong & Co., explained that the substantial year-on-year expansion indicated the system's overall robustness and support from sustained economic activity.

He also suggested that the slight dip in July could be due to normal balance sheet adjustments among large banks, such as reduced deposit growth as businesses utilized their balances instead of borrowing, loan repayments, and shifts in investment holdings. Ravelas emphasized that the decline was more likely a temporary correction rather than a sign of weakness, as total resources remained above P38 trillion.

Banks held the majority of the financial system's resources at P31.7 trillion in July, representing an 10.8 percent rise from P28.6 trillion a year earlier. This accounted for approximately 83 percent of total financial system resources. Major lenders, including universal and commercial banks, continued to dominate the banking industry, with P29.35 trillion in resources, a 10.1 percent increase from P26.66 trillion in July 2025.

Thrift banks saw resources grow by 10.6 percent to P1.52 trillion, while digital banks experienced the fastest growth with resources surging by 50.7 percent to P213.6 billion from P141.7 billion. The Bangko Sentral ng Pilipinas has been promoting digital banking to increase access to formal financial services. The central bank recently authorized a seventh digital bank license after temporarily limiting the number of digital banks in the country.

Rural and cooperative banks experienced a 46.8 percent increase in combined resources to P623.9 billion from P424.9 billion. Non-bank financial institutions held resources of P6.39 trillion, up from P6.11 trillion in July 2025. However, the data for non-bank institutions as of end-March 2026 was only available up to that date. Non-bank financial institutions included BSP-supervised investment houses, financing firms, investment companies, securities dealers and brokers, pawnshops, lending investors, credit card companies, government non-bank financial institutions like the Philippine Guarantee Corp., Small Business Corp., and the Social Security System, along with private insurance companies.