Major Philippine banks remain strong and continue to support the country’s financing requirements despite the lingering COVID-19 pandemic, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said on Monday.
“Key universal/commercial banks’ performance indicators showed a steady rise in assets, loans, and deposits, and sustained profitability with ample credit loss reserves, sufficient liquidity and capital buffers,” said Diokno in an online briefing.
He said assets of universal and commercial banks grew 8.2 percent year-on-year at end-April 2022 to P19.4 trillion, higher than the 4-percent expansion posted a year ago. Deposits rose 8.7 percent, mainly accounting for the asset expansion.
Total loan portfolio, which largely comprised U/KBs’ assets, climbed 9.8 percent year on year to P10.7 trillion at end-April 2022. Banks extended the loans to productive sectors like real estate, wholesale and retail trade and manufacturing.
Credit to micro, small and medium enterprises stood at P334.8 billion, while lending to households, including residential real estate, reached P1.7 trillion.
Alongside improving economic conditions and credit activity, loan quality showed signs of recovery as their non-performing loan ratio eased to 3.6 percent at end-April 2022 from 3.9 percent a year earlier.
The U/KB industry’s NPL coverage ratio, on the other hand, increased to 95.2 percent in April this year from 87.7 percent during the same month in 2021.
“The full implementation of the Financial Institutions Strategic Transfer Act and the extension of effectivity of some of BSP’s credit-related relief measures are seen to provide support to the continued growth in U/KB lending,” Diokno said.
The industry’s net profit rose 26.7 percent year on year to reach P61.4 billion at end-March this year, a reversal from the 4-percent contraction in the same period in 2021.
U/KBs also continued to be well-capitalized with risk-based capital adequacy ratios of 16.2 and 16.8 percent on solo and consolidated bases, respectively, as of end-March 2022.
The industry registered a liquidity coverage ratio of 200.3 percent on solo basis at end-February 2022, well-above the 100-percent minimum requirement. This indicates a strong liquidity position to support short-term funding requirements.
Diokno said amid economic recovery and positive business and consumer sentiment, the BSP remained committed to pursuing regulatory and legislative reforms aimed at ensuring a safe, sound, and resilient financial system—one that contributes to the sustained growth of the economy, while supporting responsible innovation and the country’s broader sustainability agenda.