TOTAL RESOURCES held in the Philippine financial system climbed to their highest-ever level after reaching over P38.5 trillion as of August, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Resources of Philippine banks and nonbank financial institutions (NBFIs) rose by 11.15% to P38.561 trillion at end-August from P34.694 trillion in the same period last year.

This broke the previous record of P38.391 trillion recorded as of the first half of 2026. It also marked the second straight month that resources posted a double-digit annual growth.

Month on month, the financial system’s combined resources inched up by 1.23% from P38.094 trillion.

The financial system’s resources include the funds and assets of banks and NBFIs such as deposits, capital, and bonds or debt securities, but exclude those from the central bank.

Banks alone held P32.169 trillion worth of resources, climbing by 12.53% from P28.586.4 trillion seen a year earlier.

Broken down, universal and commercial banks’ resources grew by 11.81% year on year to P29.778 trillion at end-August from P26.632 trillion previously. This accounted for the bulk of the sector’s resources during the period.

Thrift banks had P1.542 trillion in total resources in the eight months to August, 11.75% higher than the P1.38 trillion logged in the prior year.

Meanwhile, the combined resources of digital banks stood at P225.2 billion, surging by 51.14% from P149 billion in the comparable year-ago period.

Rural and cooperative banks’ financial resources also increased by an annual 46.83% to P623.9 billion from P424.9 billion.

On the other hand, the latest available central bank data showed that the resources held by NBFIs stood at P6.392 trillion as of end-March, 6.6% more than P5.996 trillion from a year earlier. There were no data for nonbanks as of end-August this year.

NBFIs include investment houses, finance companies, security dealers, pawnshops and lending companies, nonstock savings and loan associations, credit card companies, private insurance firms, and authorized agent banks of foreign exchange corporations.

State-run institutions such as the Philippine Guarantee Corp., Small Business Corp., Social Security System, and Government Service Insurance System are also considered nonbank financial firms.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said financial system resources grew as of August as financial institutions continued to expand their lending, deposits, income, and assets.

“The record P38.56-trillion financial system resources underscore the resilience of the Philippine financial sector,” he said in a Viber message. “Growth was driven mainly by solid loan expansion, rising deposits, healthy bank earnings, and continued balance sheet growth among major banks.”

Meanwhile, Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion noted that resources surging to a fresh high show that the banking sector remains sound and a key economic driver.

“The record level of financial system resources reflects a banking sector that remains liquid, well-capitalized, and actively supporting economic activity,” he also said via Viber. “Growth continues to be driven by healthy deposit inflows, credit expansion, and balance-sheet growth across both traditional and digital financial institutions.”

Financial system resources will likely continue to expand in the coming months, according to the economists, but the rate of increase may ease as tighter economic conditions weigh on banks.

“Moving forward, resource growth is likely to remain positive, although the pace may moderate as higher interest rates, inflation pressures, and softer economic momentum weigh on loan demand and asset growth,” Mr. Asuncion said.

Last week, the BSP extended its tightening cycle after delivering a larger-than-expected 50-basis-point (bp) rate hike to bring benchmark borrowing costs to a nearly two-year high of 5.5%.

This was the first 50-bp hike in nearly four years or since February 2023, when the central bank aimed to prevent inflation from breaching its target. It also brought its cumulative hikes since April to 125 bps.

Still, Mr. Ravelas noted that the financial system may remain healthy despite emerging pressures.

“Moving forward, resource growth will hinge on credit demand, interest rates, inflation, and the strength of economic activity,” he said. “While the pace may moderate, the sector remains well-capitalized, liquid, and fundamentally sound.” — Katherine K. Chan