By Katherine K. Chan, A reporter
TOTAL COSTS of The Philippine financial system increased by 8.08% year-on-year to reach about P37 trillion by the end of 2025, preliminary data from the central bank showed.
Assets held by banks and non-bank financial institutions (NBFIs) rose to P36.932 trillion last year from P34.172 trillion by 2024, according to data released by the Bangko Sentral ng Pilipinas (BSP).
These resources include funds and assets such as deposits, capital, and bonds or debt securities.
Banking services increased by P30 trillion in 2025, as they jumped 8.67% to P30.706 trillion from P28.256 trillion in 2024.
In total, international and commercial banks accounted for the largest share of the sector’s resources at P28.572 trillion, up 8.07% from P26.438 trillion last year.
Thrift banking services increased by 24.43% to P1.456 trillion at the end of 2025 from P1.17 trillion at the end of 2024.
Digital banking services also increased by 41.98% year-on-year to P172.5 billion by the end of 2025 from P121.5 billion previously.
The latest available data also showed that the services of rural and cooperative banks stood at P505.9 billion as of the end of September 2025. This was 4.02% lower than the P527.1 billion seen for the entire year of 2024.
On the other hand, non-banks had assets worth P6.226 trillion in the first nine months of 2025, which is 5.25% higher than the 2024 total of P5.916 trillion.
There was no data available for the end of 2025 for rural banks and non-banks.
Banks include investment houses, finance companies, securities dealers, pawnshops, and loan companies.
Institutions such as non-stock savings and loan associations, credit card companies, private insurance companies, the Social Security System, and the Public Service Insurance Scheme are also considered NBFIs.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the continued growth of bank loans and deposits and continued profitability of the industry boosted financial resources throughout the year.
“This is almost twice the growth of the economy by 4.4% in 2025 (and it was) and because of the continuous growth of two digits of bank loans, the continuous growth of bank deposits, the continuous growth of the income of banks, which are among the most profitable industries in the country for many years,” he said in a Viber message.
Since May 2024, bank lending has grown at a double-digit rate every month. This figure occurred in December last year, when the growth of bank loans fell to a 22-month low of 9.2%.
Meanwhile, the latest data available from the BSP showed that bank deposits increased by 7.58% year-on-year to P21.066 trillion as of September from P19.581 trillion previously.
The recent policy easing has also allowed banks to benefit from higher trading profits and investment returns, noted Mr. Ricafort.
Starting in August 2024, the central bank has so far reduced the main borrowing cost by a total of 200 basis points (bps) to a three-year low of 4.5%.
On the other hand, the US Federal Reserve’s benchmark rate currently stands in the 3.5%-3.75% range following a 175 bps hike from September 2024.
Jonathan L. Ravelas, senior consultant at Reyes Tacandong & Co., also noted that the increase in bank and non-bank financial services last year “showed resilience and confidence in the system.”
Mr. Ravelas said that the growth of resources this year will be driven by bank lending in the most important sectors such as infrastructure and its use and the impact of capital market activity, trust funds and insurance on NBFIs.
“In 2026, growth will be more moderate but strong, as banks focus on targeted lending in key sectors such as infrastructure and capital spending, while non-banks benefit from capital markets activities, trust funds, and insurance,” he said via Viber. “The issue this year is from quick accumulation to moral, high-quality growth.”
Meanwhile, Mr. Ricafort said that further expansion of monetary policy “will lead to higher trade and other investment gains, as well as a greater demand for loans, which will also be major causes of growth in the total assets and resources of the banking system and the financial system as a whole.”
The Monetary Board is expected to cut the key policy rate by another 25 bps at its meeting on Thursday to 4.25%, based on BusinessWorld poll of 16 analysts.
