Strong deposits keep domestic banking industry resilient

By Julito G. Rada

THE domestic banking industry remained resilient in 2022, marked by the sustained growth in assets, deposits and profit, along with adequate capital and liquidity buffers, the Bangko Sentral ng Pilipinas said in a report over the weekend.

“The banks’ asset growth, funded mainly by deposits, enabled the banking system to continue to support the economy’s recovery through improved credit activity,” the BSP said in its latest report on the financial system.

“Importantly, the financial soundness indicators on capital adequacy, asset quality, profitability, liquidity and sensitivity to market risk point to the continued stability and resilience of the banking system despite tighter financial conditions,” it said.

Data showed that total assets of the banking system last year grew by 10.7 percent to P23.04 trillion, faster than the 7-percent increase in 2021.

Universal and commercial banks held the largest share of the total assets of the banking system at 94.2 percent (P21.70 trillion). Thrift banks and rural and cooperative banks each held around 4.2 percent (P968.3 billion) and 1.6 percent (P372.5 billion), respectively.

Lending continued to support economic recovery as gross loans climbed 10.8 percent to P12.65 trillion in 2022, faster than the 4.8-percent growth in 2021.

Bank loans went mainly to real estate activities (18.3-percent share, P2.3 trillion), household consumption (11.0 percent, P1.38 trillion), wholesale and retail trade (10.9 percent, P1.37 trillion), manufacturing (10.2 percent, P1.28 trillion), electricity, gas, steam and air-conditioning supply (9.6 percent, P1.29 trillion) and financial and insurance activities (8.3 percent, P1.05 trillion).

The BSP said that alongside the improvement in credit activity, the banking system’s non-performing loan ratio further eased to 3.2 percent in 2022 from the 4.0 percent in 2021. This was accompanied by high NPL coverage ratio of 107.0 percent, increasing from the 87.7 percent in 2021. The NPL ratio is expected to remain in single-digit and to gradually return to pre-pandemic levels.

Pse Index Closing

Friday,

Data from the Department of Energy’s Oil Industry Management Bureau’s Year-End Comprehensive Report showed that total petroleum demand reached 26.803 billion liters last year, an increase of 9.2 percent from 24.553 billion liters in 2021.

This translated into an average daily requirement of 73.4 million liters last year, up from 67.3 million liters in 2021 amid the increased economic activity and less stringent travel restrictions implemented nationwide.

Petron Corp. had the biggest market share in 2022 at 21.29 percent, followed by Shell Pilipinas Corp. with 15.55 percent and Chevron Philippines with 4.92 percent. The other small players cornered 50.81 percent of market demand.

Meanwhile, total oil import bill amounted to $19.579 billion, up by 61.1 percent from $12.154 billion in 2021. “This was attributed to high import cost of crude and finished petroleum products in 2022,” the DOE said.

Net oil import volume slightly increased last year to 25.501 billion liters from 23.628 billion liters in 2021. Total oil import cost was made up of 77.4 percent finished petroleum products and 22.6 percent crude oil. The import cost of crude oil reached $4.429 billion, or 95 percent higher than $2.271 billion year-on-year.

The DOE said product import cost registered a growth of 53.3 percent from $9.883 billion to $15.15 billion on higher import costs of finished products.

NEW IC COMMISSIONER. Senior leaders of the National Reinsurance Corporation of the Philippines pay a courtesy visit to newly appointed Insurance Commissioner Reynaldo Regalado (fourth from left) at the Insurance Commission. With Regalado are (from left) Nat Re head of risk and compliance Jacqueline Dy, head of life reinsurance Jaime

Jose Javier, president and chief executive Allan Santos, head of data administration and technology Cinderella Gernan and head of finance Santino Sontillano.