THE Bangko Sentral ng Pilipinas (BSP) reported that the local financial system was in the pink of health toward the end of last year despite global volatility in financial sectors worldwide.
In its report on the Philippine financial system for the second semester of the year, the Central Bank said the positive performance of the banking sector was “evident across banking groups” and was seen as sustained growth in assets, loans, deposits and capital.
In particular, the BSP said the universal and commercial bank industry primarily financed the growth of the major economic sectors, such as real estate, wholesale and retail trade, and manufacturing.
Meanwhile, the thrift bank and rural and cooperative bank industries supported the retail lending segment, particularly in providing loans to consumers, the micro, small and medium enterprises and the agri-agra sector.
“The financial soundness indicators affirm that the banking system is stable and resilient despite global uncertainties,” the BSP said.
Banks’ capital —which is mainly comprised of common equity and retained earning—remained well above domestic and global benchmarks while credit quality was satisfactory notwithstanding double-digit loan growth.
The BSP also said profits generated primarily from core income were at a record high and the banks’ high-quality liquid assets were sufficient to absorb shocks while adequately providing the financing needs of the growing economy.
The BSP’s surveillance activities, the Central Bank said, are complemented by proactive engagement with supervised financial institutions promoting effective management and monitoring of incipient risk to the system.
Foreign bank branches and subsidiaries, the foreign currency deposit system, trust operations, quasi-banks and other nonbank financial institutions all registered positive growth contributing to the resilience of the overall financial system.
“As a whole, the strong fundamentals of the financial system provided a solid foundation for its sustained positive performance in 2018. These, together with the BSP’s sustained implementation of financial sector reforms and support from industry participants, will enable the financial system to remain in the growth trajectory moving forward,” the BSP said. — BusinessMirror