By Luisa Maria Jacinta C. Jocson, Reporter

THE PHILIPPINE BANKING industry’s total assets jumped by 9.3% year on year as of end-January, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Banks’ combined assets rose to P27.11 trillion as of end-January from P24.81 trillion in the same period a year ago.

Month on month, total assets slid by 1.2% from P27.43 trillion as of end-December.

Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP), net of allowances for credit losses.

The banking sector’s total loan portfolio inclusive of IBL and RRP climbed by 13.7% to P14.69 trillion as of end-January from P12.92 trillion in the same period a year ago.

Net investments, or financial assets and equity investments in subsidiaries, went up by 5.8% to P7.68 trillion as of end-January from P7.25 trillion a year prior.

Net real and other properties acquired increased by 9.3% year on year to P117.14 billion from P107.13 billion in the same period in 2024.

On the other hand, cash and due from banks amounted to P2.65 trillion as of end-January, down by 1.4% from P2.69 trillion a year earlier.

Banks’ other assets jumped by 7.4% to P1.98 trillion from P1.84 trillion in the previous year.

Meanwhile, the total liabilities of the banking system rose by 9.2% to P23.71 trillion from P21.71 trillion in the year-ago period.

“Philippine banks’ total asset growth is consistent with the fact that they are among the most profitable industries in the country, with earnings growth much faster than GDP growth for the country’s largest banks,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

“As a result, relatively large earnings partly add to the capital of banks, on top of banks’ various fund-raising activities through capital markets or strategic investors.”

Latest data from the BSP showed the net profit of the country’s banking industry rose by 9.76% year on year to P391.28 billion in 2024.

The growth in total assets is also consistent with strong lending activity, Mr. Ricafort said.

Bank lending jumped by 12.8% to P13.02 trillion in January, its fastest pace in over two years, separate central bank data showed.

Mr. Ricafort also noted the manageable bad loan ratio which could “partly improve banks’ asset quality, profitability, and overall total resources.”

The banking industry’s nonperforming loan ratio rose to 3.38% in January from 3.27% in December. However, this was lower than 3.44% in the same month in 2024.

“The Philippines remains one of the fastest-growing economies in Asia, so the banking industry would be one of the biggest beneficiaries in terms of faster growth in loans, deposits, spreads, fee income, and overall revenues,” Mr. Ricafort added.