THE Philippine banking system remained well-capitalized and liquid in the first half of 2026, allowing banks to sustain lending to households and businesses despite a more uncertain economic environment.
In its Report on the Philippine Financial System for the First Semester of 2026, the Bangko Sentral ng Pilipinas (BSP) said banks’ capital and liquidity buffers for the first six months of the year are well above regulatory requirements, while profitability remained sustained and asset quality manageable.
“The Philippine banking system remains in a strong position to provide funding to Filipino households and firms,” BSP Governor Eli Remolona Jr. said.
The BSP noted, however, that banks, businesses and households had become more selective in their borrowing, lending and investment decisions amid heightened uncertainty.
Despite this, supervisory assessments showed that credit conditions remained supportive, with stable funding conditions and manageable risks across the banking system.
The central bank said it would continue to balance financial stability with efforts to expand financial inclusion as financial services become increasingly digital and accessible.
“We will continue to support innovation while ensuring that strong governance, sound risk management, and operational resilience remain in place,” Remolona said.
The report also highlighted developments in foreign currency deposit units, trust operations and digital financial services, which continued to broaden access to financing, investments, savings and other financial products.
It also outlined BSP initiatives involving cybersecurity, digital finance, Islamic banking, reporting governance and supervisory technology.
The central bank said it continued to use stress testing and advanced analytics to strengthen risk monitoring and supervisory oversight.
