Christy Balita
Research expert covering the Philippines
Banking in the Philippines - statistics & facts
From less than 30 percent of the Filipino population having a formal account with a financial institution, this figure almost doubled in 2021 thanks to e-money accounts. E-money providers, such as mobile wallets, has made it possible for Filipinos to access financial services usually available by having a bank account. While the estimated banked population in the Philippines has shown growth, e-money and digital banks heavily impacted the accessibility of financial services to its population.
The banking industry in the Philippines plays a crucial role in the country’s economy, contributing over a trillion Philippine pesos in 2023. The assets of the Philippine banking system reflected constant growth in the past years, while the ratio of nonperforming loans (NPL) remained below four percent. The Philippine banking system was expected to continue implementing reforms necessary to satisfy the banking needs of Filipinos while boosting the economy.
On the other hand, thrift banks comprise savings and mortgage banks and loan associations, which focus on accumulating and investing depositors’ savings. This type of bank also provides short-term and long-term financing. Meanwhile, rural and cooperative banks are authorized to offer essential financial services to rural residents and financial assistance to farmers. Finally, Islamic banks cater to Muslim Filipinos and operate according to Islamic laws.
Measures to expand financial inclusion has paved the way for an increased share of Filipinos with access to financial services not limited to traditional banking. As the banking industry continues to expand, the presence of digital banks and e-money accounts will continue to boost the Philippine banking infrastructure.
The banking industry in the Philippines plays a crucial role in the country’s economy, contributing over a trillion Philippine pesos in 2023. The assets of the Philippine banking system reflected constant growth in the past years, while the ratio of nonperforming loans (NPL) remained below four percent. The Philippine banking system was expected to continue implementing reforms necessary to satisfy the banking needs of Filipinos while boosting the economy.
Philippine banking system overview
Banks in the Philippines are regulated by the Bangko Sentral ng Pilipinas or the central bank and are classified into universal, commercial, thrift banks, rural, cooperative, and Islamic banks. Universal banks are authorized to provide various services, including investment, commercial, and development banking, mutual funds, and housing loans. Commercial banks, on the other hand, are privately owned institutions that accept deposits and offer checking services. In the Philippines, these kinds of banks are the largest group of financial institutions and the most popular among customers with different financial needs because of their vast financial services. Among the largest universal and commercial banks in the country in terms of assets were BDO Unibank Inc., Metropolitan Bank and Trust Company, and the Land Bank of the Philippines.On the other hand, thrift banks comprise savings and mortgage banks and loan associations, which focus on accumulating and investing depositors’ savings. This type of bank also provides short-term and long-term financing. Meanwhile, rural and cooperative banks are authorized to offer essential financial services to rural residents and financial assistance to farmers. Finally, Islamic banks cater to Muslim Filipinos and operate according to Islamic laws.
Digital banking driving financial inclusion
Consistent efforts to encourage citizens to open an account at a financial institution resulted in an increased share of Filipinos having a formal account with a financial provider. According to the Philippine Central Bank, this value almost doubled between 2019 and 2021, based on its financial inclusion survey. Incremental to this growth was the introduction of e-money accounts, particularly mobile wallets, which allowed users to easily open an account that allowed them to send and receive money as well as make online payments. In addition, several banks introduced digital onboarding capacity to make it easier for their customers to open an account without having to leave their houses. The central bank has approved licenses for six digital banks to operate, with additional licenses expected to be awarded in 2025. As of June 2024, Maya Bank registered the highest asset value among other digital banks in the Philippines, followed by GoTyme Bank.Measures to expand financial inclusion has paved the way for an increased share of Filipinos with access to financial services not limited to traditional banking. As the banking industry continues to expand, the presence of digital banks and e-money accounts will continue to boost the Philippine banking infrastructure.
