THE Philippine banking system continued to expand its reach in the country as data from the Bangko Sentral ng Pilipinas (BSP) reveal that more bank branches were put up by the end of April.
Central Bank numbers show that about 70 bank branches were added to the banking industry’s network nationwide in the first four months of the year, putting the total number of bank branches to 12,434 by the end of April this year.
The bulk of the bank branches across the nation are still dominated by the bigger players in the industry. More than half, or 6,661 branches nationwide, are universal and commercial banks operating in the country. These include private domestic banks, government banks and foreign bank branches.
Banks operating in the countryside, meanwhile, also took up a significant chunk of the total banking network in the country during the period. Rural and cooperative banks have 3,106 branches nationwide by the end of April. Thrift banks, meanwhile, have 2,667 branches during the period.
The steady expansion of the banks’ physical network across the country reflects their overall growth in terms of profit and balance sheet.
In a recently published assessment of the local banking system, S&P Global said they believe the banks’ “well-established domestic franchise will continue to help them to sustain a strong, stable and diversified customer deposit profile.”
“In our opinion, the Philippine economy’s strong growth trajectory will drive constructive development outcomes and close infrastructure gaps. Supportive fiscal policies and an improving investment climate will aid growth. All these factors provide sound growth opportunities for the country’s banks,” the credit watcher said.
Also over the weekend, Moody’s released their banking system outlook on the Philippines’s financial system, painting a rosy picture for banks in the next 12 months.
“Banks will continue to benefit from strong economic growth. The Philippines’s economic growth rate will remain among the highest in Asia, underpinned by strong domestic consumption and an expansionary fiscal policy despite a budget delay and an export slowdown due to a weakening of global economic growth,” Moody’s said.
The major credit watcher also said the banks’ profitability will remain stable this year as higher interest rates and lower reserve requirement ratios will balance out the banks’ investments and expenditure.
“Continued loan repricing following rate hikes by the Central Bank in 2018 and reductions in reserve requirement ratios will boost net interest margins. At the same time, however, operating expenses will increase due to investment in branch expansion and IT infrastructure,” Moody’s said. — Bianca Cuaresma