PH banking sector’s assets hit a record high in Sept.

The banking industry’’s total assets rose to a record high in September, on the back of strong growth in loans, supported by the expansion of the domestic economy.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that the increase in the Philippine financial system’s total assets was driven by the steady expansion in the size of banks’ total loans, which accounted for more than half of all assets.

This was testament to the improving health of the industry’s asset quality as the increase in loans offset dips in foreclosed real estate properties and other nonperforming assets.

At the end of September, the financial system’s total assets rose to P10.42 trillion, up 14.03 percent year-on-year. Last June, the industry’s assets stood at P10.22 trillion.

Banks’ assets measure the amount of cash that is being put to work to earn money.

The biggest component was the industry’s total loan portfolio, which stood at P5.41 trillion. This was up 19.24 percent year-on-year.

Other items showed a continuing improvement in the industry’s books.

For instance, gross non-performing loans (NPL) declined by 3.92 percent, while real and other properties acquired (ROPA)—referring to foreclosed assets—fell by 3.78 percent.

Banks also had more than enough money to cover for possible NPL defaults.

At the end of September, the industry’’s NPL coverage ratio rose to 116.49 percent from 116.32 percent in June.

The BSP has repeatedly cited the strength of the local banking sector as one of the pillars keeping the Philippine economy healthy.

“Sustained structural reforms have kept our banking system in good shape, demonstrated by improved quality of banks’ assets and loan portfolios, profitability metrics as well as adequacy of capital,” BSP Governor Amando M. Tetangco Jr. said in a speech late last month.

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