By Komfie Manalo
Data from the Bangko Sentral ng Pilipinas (BSP) showed that, as of the end of May this year, improved income and rising bank deposits had raised the total assets of domestic banks by 12.4% to P25.62 trillion, up from last year's P22.78 trillion.
According to the BSP, the figure was higher than the country's banking sector's total assets of P25.48 trillion in April this year.
"This is again more than twice faster than GDP (gross domestic product) growth, largely attributed to the sustained double-digit growth in the net income of banks, considered among the most profitable industries in the country," Rizal Commercial Banking Corporation chief economist Michael Ricafort said.
"This is also similar, but faster than loans growth at nearly +10% year-on-year in recent months, as well as the continued growth in bank deposits that help the booking of more loans as the economy recovers further with no more Covid-related restrictions since the Covid state of public health emergency was finally lifted since July 22, 2023," he added.
Ricafort said this will support the recovery of some businesses hit hard by the pandemic, such as tourism and other related allied industries.
"Possible cut in Fed rates and local policy rates for the coming months and years would further boost trading gains and other investment income of banks," he said.
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