Philippine banks' loan growth up 16.4% to $171.93b in 2017

Asset expansion clocked in at a healthy $293.63b.

The Philippine banking sector registered double-digit growth levels in 2017 as asset expansion rose 11.6% to $293.63b (P15.2t), according to a statement from the central bank.

The strengthening in balance sheets came amidst a 16.4% YoY increase in loans to $171.93b (P8.9t). Banks also reported an improvement in non-performing loan (NPL) ratio to 1.7% and a strong capital adequacy ratio (CAR) of 15% whilst keeping sufficient liquidity with adequate stock of high-quality liquid assets (HQLAs) as the liquidity coverage ratio stood at 185.3% on solo basis.

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“Overall, the Philippine financial system’s positive performance in 2017 has been grounded on the BSP’s sustained implementation of proactive reforms that will raise the bar on risk management systems, promote sound liquidity and capital positions, and enable greater access to financial services,” Bangko Sentral ng Pilipinas noted. “Banks’ commitment to these reforms and prudent risk-taking ensure the stability and soundness of the financial system.”

The banking system’s foreign currency deposit unit (FCDU) system exhibited strong liquidity and positive net profit. Foreign bank branches and subsidiaries also sustained their growth trajectory as a total of 26 foreign banks were approved and authorised to operate by the BSP in the Philippines last year.

The local financial sector is also making good progress in expanding its geographic footprint as after hitting 587 operating banks and 11,206 bank branches and other offices, including 919 micro banking offices (MBOs) as of end-2017.