THE Philippine banking sector’s assets rose to P31.38 trillion as of end-August, data from the Bangko Sentral ng Pilipinas (BSP) showed.
This is higher than the previous month’s P30.81 billion and the P27.73 billion recorded during the same month last year.
Bank assets primarily consist of deposits, loans, and investments, including cash, amounts due from other banks, interbank loans receivable (IBL), and reverse repurchase (RRP) arrangements, adjusted for allowances for credit losses.
Philippine Institute for Development Studies (PIDS) senior fellow John Paolo Rivera said the increase may reflect continued growth in lending, deposit-funded activities and investment holdings.
“This suggests that the banking sector continues to expand despite elevated interest rates and broader economic uncertainties,” Rivera said.
“Asset growth could remain positive, supported by credit demand and financial intermediation,” he added.
The aggregate loan portfolio, inclusive of IBL and RRP, hit P17.23 trillion, higher than the previous month’s P16.95 trillion and the P15.19 trillion recorded in August 2025.
Net investments, including financial assets, and equity investments in subsidiaries, also rose to P9.04 trillion from P8.93 trillion a month earlier and P8.17 trillion a year earlier.
Cash and amounts due from banks, meanwhile, also increased to P2.07 trillion from P2.01 trillion in August 2025 but slightly lower than July 2026’s P2.15 trillion.
The value of net real and other properties acquired grew to P165.45 billion from P130.94 trillion recorded a year earlier. It is, however, lower than the P165.7 trillion posted a month ago.
Other assets totaled P2.77 trillion, more than the P2.61 trillion and P2.23 trillion recorded a month and year earlier.
The banking system’s total liabilities, meanwhile, rose to P27.55 trillion from P27.15 trillion in July 2026. It is also higher than the P24.17 trillion recorded in August 2025.
Chinabank economist Domini Velasquez said the increase in banks’ assets signals that the “banking system continues to expand its balance sheet despite the weaker economic backdrop.”
“This suggests that overall credit growth is being driven by selected sectors rather than broad-based strength in credit demand,” Velasquez said.
Rivera, however, warned that “slower economic growth and higher borrowing costs may temper expansion.”
“(The banks) Need to ensure asset growth is accompanied by sound loan quality, adequate capitalization and prudent risk management,” Rivera said.
NIÑA MYKA PAULINE ARCEO
