The banking sector remained sound and stable in the first semester despite continuing global economic woes, the Bangko Sentral ng Pilipinas said in a report recently submitted to Congress and the President.
According to the BSP’s “Philippine Financial System Report,” banks saw an increase in profits and assets, maintained more than adequate levels of capital, and lent more to individual and corporate borrowers in the first half of the year..
“Despite the lingering fragilities in the international financial system and uncertainty in the global economy, the Philippine financial system continued to grow on the back of sound macroeconomic fundamentals and sustained implementation of deep-ranging reforms,” the report said.
Business activities increased, which in turn generated earnings for banks, it also said.
Banks’ combined net income in H1 reached P60.8 billion, up by 17 percent year-on-year from P51.9 billion. Total resources were also up 5.6 percent to P7.4 trillion. More than half of the resources were deposits, reflecting growing public confidence in banks, the report added.
The country's credit-to-GDP ratio (the ratio of outstanding loans to GDP) improved to 40.6 percent from 38.6 percent in the same period last year.
Banks' average capital adequacy ratio (the measure of a bank's capital in proportion to its risk) rose to 16.7 percent in H1 2012, more than double the minimum rate prescribed by international regulatory standards. — BM, GMA News
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