(CNN Philippines) — At the end of 2014, the Bangko Sentral ng Pilipinas (BSP) noted that the country had 648 operating banks, 9,700 bank branches, 15,695 ATMs, 517 microfinancing banking offices, and 251 banks with e-banking services (pertaining to the Internet, mobile services, phone services, e-wallets, and remittance cards).
The numbers have been a boon to the country’s financial sector.
“[I]t came as no surprise that international credit watchers and market analysts consider the Philippine banking system as one of the strongest in the region,” the bank said in a statement.
Read: Income shouldn’t end with a salary
For example, the BSP pointed out how the country’s banking system, out of 69 others around the world, is the only one that received a positive outlook from credit-watcher Moody’s two times in a row.
“The BSP continues to widen financial access points under a defined financial inclusion strategy,” the BSP said.
According to the bank’s figures, the financial system grew by 12% in 2014. The expansion was largely driven by the double digit growths in loans (19.5%), and portfolio investments (13.3%), “with stable funding from domestic (98.8 percent), retail deposits which similarly grew by 12.1 percent year-on-year.”
“Despite the robust expansion, the quality of banks’ credit underwriting standards and commitment to asset cleanup are still on point as gross non-performing loan (NPL) ratio further eased to 2.3 percent from 2.8 percent last year.”
Related: Inflation eases off in Q1 2015
The bank said that this figure is 1.7 percentage points lower compared to that during the pre-1997 Asian Financial Crisis level of approximately 4%, and is also a “significant turnaround” from the the peak 16% during the 2001 Oil Crisis.
“Meantime, loan loss coverage ratios for NPLs and non-performing assets (NPA) were kept at 119.8 percent and 77 percent, respectively,” the BSP said.,
Figures also show that banks’ capitalization remained “strong.” Capital adequacy ratio — the ratio between a bank’s capital to its risk — “stood at 15.4 percent on a solo basis and 16.2 percent on a consolidated basis.”
“Domestic banks are intrinsically stronger and more profitable compared to foreign counterparts.”
BSP adds that banks reported a positive bottom line as net profit reached P135 billion from P144.9 billion in 2013, despite the 6.9% dip.
“Notwithstanding the solid performance of the financial system in 2014, the BSP continues to closely monitor potential pressure points. This is in line with the BSP’s objective of promoting greater financial stability.”
