DESPITE headwinds, the Philippine financial system enjoyed higher deposits and loan expansion, propelling the sector’s total resources to a new record high.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that the combined funds and assets of banks (excluding the central bank) and non-bank financial institutions (NBFIs) climbed as of end-June to a record P38.31 trillion, up 8.93 percent from the P35.17 trillion as of June last year.
BSP data showed that on a month-on-month basis, total resources held by the country’s financial system increased by 1.78 percent from the P37.64 trillion as of end-May 2026.
Banks accounted for the bulk, or 83.43 percent of total resources, while NBFIs held the remaining 16.57 percent share.
Resources held by banks climbed 9.95 percent to P31.96 trillion as of end-June from P29.067 trillion in end-June 2025 while those held by non-banks climbed 3.93 percent to P6.345 trillion as of the first half of the year.
‘Despite a more challenging environment marked by elevated inflation and softer economic growth, the data shows that liquidity in the financial system remains ample and confidence in formal financial institutions remains intact,’ Jonathan L. Ravelas, senior adviser at Reyes Tacandong and Co. said.
Ravelas said the growth in the total resources to a record high reflects the ‘continued strength’ of the banking sector, which remains the primary driver of asset growth.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said the growth in the country’s financial system resources could be ‘largely attributed to the continued growth in banks’ assets, especially driven by banks’ loan growth consistently near 10 percent in recent months amid some hedging activities before borrowing costs go up further as a matter of prudence.’
Ricafort said the growth in resources within the financial system could have also been driven by banks’ deposits especially since the ‘doubling of deposit insurance that increased confidence by the depositing public.’
Further, he said the sustained large net income/earnings of banks that are added to banks’ capital also drove the financial system resources.
Total resources
BROKEN down, universal and commercial banks (UKBs) continued to dominate the sector, holding 92.77 percent of total banking resources, or P29.65 trillion. This is higher by 9.29 percent from P27.13 trillion as of June 2025.
Thrift banks accounted for 4.74 percent of all resources in Philippine banks, at P1.515 trillion as of June2026, posting a 10.22 percent increase from P1.369 trillion as of end-June 2025.
Resources of rural and cooperative banks also grew 38.15 percent to P587 billion as of June 2026, representing 1.84 percent of the banking system’s assets from P424.9 billion in the same period in 2025.
Digital banks posted the largest growth in resources, surging by 46.66 percent to P208.4 billion as of end-June 2026, compared to the P142.1 billion as of June 2025.
The share of resources held by digital banks, however, is only equivalent to .65 percent of the total resources held by banks.
Ravelas said the ‘encouraging takeaway’ from the latest data proves that funds are available to support economic activity.
However, he pointed out anew that the bigger challenge now is ‘ensuring that this liquidity is channeled into productive investments, infrastructure, business expansion, and job creation.’
Ravelas added that ‘looking ahead,’ he expects ‘financial system resources to continue growing at a high single-digit pace, supported by slightly elevated interest rates(hopefully sustainable inflation condition persists), healthy bank balance sheets, and steady deposit growth.’
The foreign exchange analyst also emphasized that the focus should not simply be on the size of financial resources but on how effectively these resources are transformed into ‘stronger, more inclusive and sustainable economic growth.’