THE banks are in the pink of health and sufficiently capitalized to better serve the financial requirements of the borrowing public, according to the Bangko Sentral ng Pilipinas (BSP).
Banks reported record-high figures in the first half, indicating continued growth in the industry, the BSP said.
At the 50th founding anniversary of the Bankers Association of the Philippines (BAP), the central bank governor reported to the industry the strong standing of the local banking system.
“We have a well-capitalized banking system, where deposits continue to climb and loans continue to increase, the bulk of which are directed to productive sectors that have multiplier effects,” BSP Governor Amando M. Tetangco Jr. said.
“In fact, the credit-rating agencies cite our stable banking system as credit-positive in giving the Philippines an investment-grade rating,” he added.
Tetangco said data as of June 2014 reveal that all the figures for consolidated assets, loans, deposits and capital of the banking industry were “uniformly at record-high levels.”
In particular, as of the first half of this year, the central bank governor said the local banking industry posted P10.28 trillion in assets, P5.2 trillion in loans, P7.9 trillion in deposits and P1.2 trillion in capital—all of which are record-high numbers since the BSP started reporting them.
However, Tetangco told bankers on Wednesday night that some issues still linger in the banking system that could potentially sap its strength if they are not adequately addressed.
For instance, Tetangco said the industry needs to uphold the integrity of pricing and valuation, as any mistake in this aspect may result to the distortion of financial opportunities and systemic pressures overtime.
Tetangco also reminded banks that while their capitals have already been under the Basel 3 reform agenda and, therefore, already at par with the global standard, there remain other components of the accord waiting for rollout.
The central bank chief said other reform components, including the exposure rates of significantly important financial institutions, leverage and liquidity ratio, as well as guidelines on derivatives, are even now being processed and are at various stages of development.