THE volatility in the global financial market may have led to a marginal decline in the assets held by the Philippine banking system as of end-July compared to the previous month, but its annual increase highlights the ‘underlying strength’ of the banking sector, according to analysts.
Experts pointed this out after data from the Bangko Sentral ng Pilipinas (BSP) showed that the total assets held by the Philippine banking system reached P30.716 trillion as of end-July2026, down 1.33 percent compared to the P31.129 trillion as of end-June 2026.
However, the total assets recorded as of end-July 2026 were 10.73 percent higher than the P27.74 trillion as of end-July 2025, central bank data showed.
Jonathan L. Ravelas, senior adviser at Reyes Tacandong and Co., said ‘the monthly decline looks temporary, while the 10.7-percent annual increase highlights the underlying strength of the banking sector.’
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), said the dip in the bank assets on a month-on-month basis could be partly attributed to ‘the effects of the war in the Middle East that led to volatility in the global financial market particularly the sell-off in the global/local bond markets that reduced investment income.’
Ricafort said another culprit behind the slight decline may be the higher non-performing loans (NPL) ratio.
Nevertheless, Ricafort said the latest annual growth in banks’ total assets has been ‘consistent and reflective of bank loans growth around over 10 percent levels.’
Moreover, Ricafort said this is consistent with the ‘high single-digit growth in bank deposits in recent months especially since PDIC insurance doubled to P1 million per depositor per bank that increased the confidence of the depositing public.’
The RCBC chief economist said the annual growth in bank assets also reflects the ‘continued profitability’ of banks which also contributed to total capital.
Moving forward, Ravelas said he expects bank assets to ‘continue growing at a healthy pace, supported by credit expansion, deposit growth, and a still-resilient domestic economy.’
Breakdown
The BSP data showed that the net total loan portfolio of banks grew 10.81 percent year-on-year (Y-o-Y) to P16.907 trillion as of end-July 2026 from P15.258 trillion.
The net total investments of banks also increased by 8.04 percent Y-o-Y to P8.905 trillion as of end-July 2026 from P8.242 trillion.
Their net real and other properties acquired, likewise, climbed by 27.72 percent to P165.702 billion as of end-July 2026 from P129.734 billion in the same period last year.
Banks’ other assets also jumped by 18.98 percent Y-o-Y to P2.602 trillion from P2.187 trillion in end-July 2025.
Their total liabilities, on the other hand, grew at a faster pace compared to bank assets.
Liabilities jumped by 11.73 percent Y-o-Y to P27.061 trillion as of end-July 2026 from P24.220 trillion in the same period a year ago. On a month-on-month basis, liabilities posted a 1.39-percent decline from the P27.442 trillion recorded in June.
Deposit liabilities amounted to P22.062 trillion, of which P18.14 trillion consisted of peso liabilities and P3.92 trillion of foreign-currency liabilities.
Liabilities due to banks climbed by 45.62 percent Y-o-Y to P225.681 billion as of end-July 2026 from P154.978.78 billion in the same period a year ago.
The unsecured subordinated debt also increased by 190.44 percent to P3.95 billion from P1.36 billion as of end-July last year.
Meanwhile, banks’ derivatives with negative fair value held for hedging increased by 150.81 percent Y-o-Y, from P2.763 billion to P6.93 billion.
Further, banks’ total capital accounts increased by 3.69 percent to P3.65 trillion as of end-July 2026, from P3.52 trillion in the same period a year ago.