The Philippine financial system demonstrated continued resilience in the second half of 2025, providing steady support to the economy, according to the Bangko Sentral ng Pilipinas (BSP).
Banking Sector Performance
The BSP's Second Semester 2025 Report on the Philippine Financial System revealed that both the banking sector and non-banking institutions under BSP supervision performed favorably during the period. Total assets of banks increased by 8.9 percent to P29.9 trillion as of December 2025, slightly down from the previous year's 9.0 percent growth but still outpacing the expansion of the Philippine economy.
Deposits and Lending
Public confidence in the banking sector remained solid, with deposits reaching P21.9 trillion at end-December 2025, up 7.4 percent year-over-year. Bank lending expanded by 11.7 percent to P17.1 trillion, supporting household consumption and business investments, including priority and underserved sectors.
Asset Quality and Capital
Asset quality remained manageable due to prudent lending practices. The non-performing loan (NPL) ratio stood at 3.1 percent as of end-December 2025, complemented by an adequate loan-loss coverage ratio of 97.2 percent. Capital positions were strong, with the solo capital adequacy ratio (CAR) at 15.8 percent and consolidated CAR at 16.2 percent, both well above the BSP's 10.0 percent minimum requirement.
Liquidity Indicators
Liquidity indicators also exceeded regulatory minimums. Universal and commercial banks' solo liquidity coverage ratio was 172.3 percent, while the solo net stable funding ratio was 132.7 percent, both above the 100.0 percent threshold.
Non-Bank Financial Institutions
BSP-supervised non-bank financial institutions continued to broaden access to financial services. Trust and foreign currency deposit unit operations expanded credit and asset management services.
BSP Reforms
The report highlighted the BSP's ongoing reforms to strengthen governance, enhance supervisory and digital capabilities, and promote inclusive and sustainable finance. BSP Governor Eli M. Remolona, Jr. emphasized the role of banks and non-bank financial institutions in mobilizing funds for economic activities, stating the BSP's commitment to fostering a regulatory environment that supports growth and resilience while advancing the interests of Filipino financial consumers.
