PH banking system grew faster despite the pandemic

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                                                  Photo: ATM machine booths outside the mall in Cubao Quezon City
                                                                                         Photo file/THEPHILBIZNEWS

By Victoria “NIKE” De Dios

The country’s banking sector grew faster and remained robust despite the challenges posed by the pandemic due to sound macroeconomic fundamentals that have boosted bank resources, loan portfolios and financing options.according to the DOF Economic Bulletin on the Banking System sent to THEPHILBIZNEWS.

Since 2018 up to 2020, the growth is attributed to the C that has boosted bank resources, loan portfolios, and financing options.

During the period May 2019 to May 2020, banking system resources rose from 93.9% of GDP to 95.8%; gross loan portfolios, from 54.3% to 55.3% of GDP; their deposit base, from 68.5% to 72.9% of GDP; and their capital base, from 10.5% to 11.0% of GDP.

Following the Global Bond issues of the Republic that fetched a tight spread of US Treasury+180 bps on its 10-year issues, Philippine banks and corporates issued, during the last seven weeks, their own bonds at the international capital markets amounting to US$3.6B for a total of US$5.2B year-to-date. This is higher than previous year issues of US$1.1B for 2018 and US$2.5B for 2019.

The international practice is that sovereign credit premiums set the benchmark behind which the corporates and banks also price their issuances.

The existence of a variety of financing options will prepare the economy to meet the requirements of sectors that will need to replenish their working capital to resume normal operations.

BANKING SYSTEM 201820192019 May2020 May
RESOURCES, P Billion17,238.80  18,026.0  17,451.5      18,741.4
       Percent Growth15.2%9.5%9.6%7.4%
       Percent of GDP94.4%92.4%93.9%95.8%
(GROSS) LOAN PORTFOLIO, P Billion  9,888.27  10,964.8  10,083.6      10,816.4
       Percent Growth15.6%13.0%10.1%7.3%
      % of GDP54.1%56.2%54.3%55.3%
(NET) LOAN PORTFOLIO, P Billion  9,632.03  10,642.3    9,808.7      10,536.2
       Percent Growth14.8%12.9%10.2%7.4%
      % of GDP52.7%54.5%52.8%53.8%
LIABILITIES, P Billion 12,189.65 13,638.71 14,928.42     16,376.23
       Percent Growth12.9%11.9%24.0%9.7%
      % of GDP66.7%69.9%80.3%83.7%
DEPOSITS, P Billion  12,760.9  13,124.3  12,738.2      14,262.9
       Percent Growth11.2%5.8%5.8%12.0%
      % of GDP69.9%67.2%68.5%72.9%
LOAN-DEPOSIT RATIO75.5%81.1%68.5%72.9%
CAPITAL ACCOUNTS, P Billion    2,067.5    2,255.3    1,945.1         2,154.4
       Percent Growth11.3%11.6%10.5%11.0%
     Nominal GDP, P Billion 18,265.19 19,516.42    18,587.00          19,566.72
     Nominal GDP, % Growth10.3%6.9%9.9%5.3%

“In the past years, the country’s banking system remains fundamentally sound despite the challenges over the years despite the (coronavirus disease 2019) pandemic,” the DOF Economic Bulletin on the Banking System added.