MANILA – Philippines’ thrift banking industry continues to show resilience from the pandemic as shown by the rise of their assets that allowed them to also help small businesses.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the thrift banking industry doubled its resources as of end-June this year to PHP1.1 trillion from around PHP566.4 billion last year.
“Deposit liabilities and owners’ funds continue to finance asset growth, highly indicative of the public’s continued trust and confidence in the thrift banking industry,” Diokno said in his speech during the opening of the three-day virtual Chamber of Thrift Banks (CTB) convention Tuesday.
Diokno said the sector remains a strong ally of the government in boosting the welfare of the micro, small and medium enterprises (MSMEs) even during the pandemic.
As of end-June this year, thrift banks extended about PHP72.3 billion worth of loans to MSMEs and this rose to PHP80 billion as of end-July, he said.
This is on top of the PHP251.2 billion that the industry lent for real estate activities and the PHP302.2 billion extended for consumer finance.
While concerns on the rise of non-performing loans (NPLs) increased during the pandemic, the sector posted an improvement on this area with the figure going down to 5.7 percent as of last June from 5.9 percent in the same period in 2019.
NPL coverage also got better after it rose to 60.4 percent from 46.8 percent in June last year.
“The industry remains highly liquid as more than a quarter of the industry resources are kept as cash or financial assets with the liquid assets-to-deposits ratio improved to 30.9 percent as of end-June 2020 from 24.9 percent a year ago,” Diokno said.
Capital adequacy ratio (CAR), a gauge of a bank’s financial health, also improved from 16 percent in end-June 2019 to 17.5 percent at the end of the first half this year.
“Amid the pandemic, these are no small feat,” Diokno added. (PNA)