BSP report highlights growth, stability of PH banking sector
published
The Bangko Sentral ng Pillipinas (BSP) underscored the continued growth momentum and
soundness of the Philippine banking sector in the first half of the year, citing broad-based asset
growth and solid profitability.
Assets increased 7.7 percent year-on-year (y-o-y) to ₱28.2 trillion in June this year, the BSP
said in its “Report on the Philippine Financial System for the First Semester of 2025.” This was
driven by stable domestic deposits and supported by strong liquidity and capital buffers. Asset
quality remained satisfactory, with loans and investments comprising the bulk of total assets.
Profit rose 4.1 percent y-o-y to ₱198.1 billion for the period ending in June 2025, reflecting
prudent risk management and sound credit governance.
According to BSP Governor Eli M. Remolona, Jr., “The banking system’s solid performance
underscores its strength in seizing opportunities, navigating emerging risks, driving innovation,
and championing inclusive and sustainable growth.”
“In line with this, the BSP will continue pursuing policies that further strengthen the banking
system. This supports an environment that helps banks to continue growing, supporting
economic activity, and responding to the evolving needs of Filipinos,” the Governor said.
The report also noted the satisfactory performance and robust growth of foreign currency
deposit units and trust entities.
Aside from these, it featured articles on strategic initiatives in the credit information system,
improvements in the anti-money laundering and counterterrorism financing regime, a more
inclusive and digitalized retirement savings account, and the establishment of a Financial Cyber
Resilience Governing Council.
These initiatives reflect the BSP’s collaboration and close coordination with its supervised
entities, other financial regulators, and industry associations to further boost the resilience of the
Philippine banking system.
Reference: [Link]
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BSP issues regulations on large value cash transactions
The Bangko Sentral ng Pilipinas (BSP) has issued new regulations on large
value cash transactions to reduce money laundering and other risks linked to
the use of cash.
Under Circular No. 1218 series of 2025, issued on 18 September 2025, large
value transactions above ₱500,000.00 (or its equivalent in foreign currency)
must be conducted through traceable channels such as checks, online fund
transfers, direct credit to deposit accounts, or digital payments. The same
limit applies to cash transactions in equivalent foreign currencies. The limit
may be reached in a single transaction or series of transactions within one
banking day.
For withdrawals beyond this limit, BSP-Supervised Financial Institutions
(BSFIs) must conduct enhanced due diligence (EDD) and, if warranted, file a
suspicious transaction report. After completing EDD, BSFIs may still allow the
larger payout if the customer provides additional documents or proof of a
legitimate business purpose.
The BSP also allows BSFIs to set even lower limits on large value cash
transactions, based on their risk assessment and the customer’s financial
profile.
Through this reform, the BSP aims to strengthen measures against the use of
cash for illegal activities, promote trust in the financial system, and ensure
that it can respond to new risks.
Reference:
[Link]
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PH banks post bad loan ratio improvement in December 2025
By Joann Villanueva
MANILA – Non-performing loan (NPL) ratio of Philippine banks posted an
improvement to 3.08 percent in December 2025 from month-ago’s 3.32
percent, which an economist traced partly to the sustained reduction in
central bank’s key rates.
The latest NPL ratio of domestic banks, based on Bangko Sentral ng Pilipinas
(BSP) data, is the lowest since August 2020.
Rizal Commercial Banking Corporation chief economist Michael Ricafort
attributed lower NPLs amid the continued rise of bank loans partly to the
total of 200 basis points reduction in the BSP’s key rates.
The reduction in the central bank’s key rates, done since August 2024, aims
to encourage more economic activity and bolster domestic economic growth.
“(This might likely be) in view of the Christmas holiday spending, in terms of
higher sales, incomes, bonuses, livelihood, all of which improved the ability
of borrowers to pay their loans/debts,” Ricafort said in a report.
He said the improvement in credit risk management, which “are better
aligned with global best practices, also led to slower growth in bad
loans/NPLs, thereby also mathematically contributing to the lower/better NPL
ratio.”
“Lower banks’ gross NPL ratio could signal improving asset quality, thereby
could lead to higher net incomes/profitability, capital, total assets/resources,
since banks are among the most profitable businesses/industries in the
country for many years,” he added.
Reference: [Link]