Philippine Financial System Sustains Growth Trajectory
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The Bangko Sentral ng Pilipinas (BSP) released the Report on the Philippine Financial System for the First Semester of 2022. The Report highlights that the Philippine financial system sustained its growth trajectory amid improving macroeconomic environment at the tail-end of the COVID-19 pandemic. The banking system continued to support the financing requirements of a recovering domestic economy.
“As the country navigates toward the post-pandemic recovery, we expect banks to be resilient amid challenges in their operating environment given their strong position,” BSP Governor Felipe M. Medalla said.
The Philippine banking system, as the core of the financial system, exhibited solid performance with the continued growth in assets, deposits, and profit, as well as stable capital and liquidity buffers and ample loan loss reserves. The system’s total assets as well as loans further expanded and were funded mainly by deposits indicating continued trust and confidence by the public in banks. Moreover, the financial soundness indicators on capital adequacy, asset quality, profitability, liquidity, and sensitivity to market risk suggest that the banking system remains stable despite tighter domestic conditions.
The Report also highlighted the sound performance of the foreign currency deposit system and trust entities.
Moving forward, the BSP will continue to pursue initiatives that will strengthen risk governance, promote responsible innovation, and mainstream sustainability in the financial system. These efforts will help foster a resilient, dynamic, and inclusive financial system that is supportive of sustainable economic growth. ###
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