Why are the banks' resources growing this fast?
Resources held in the Philippine financial system reached 38.309 trillion pesos at the end of June, their highest ever, according to the central bank's preliminary data; the annual increase was 8.91 per cent. Most of that sits with the banks, whose resources rose 9.96 per cent to 31.962 trillion pesos. Digital banks grew far faster, at 46.66 per cent, but the 208.4 billion pesos they hold is still small beside the system.[1]
A financial system's resources are somebody's asset and somebody's liability at once. Deposits do not accumulate on their own: either a bank writes a loan and the deposit appears as that loan's shadow, or an income flow arrives from outside. The central bank's release gives the stock and does not say at this frequency which asset stands on the other side. The question still deserves asking, because growth of 8.91 per cent does not fund itself.[1]
The flow from abroad has slowed
One of those income flows nearly stopped in June. Filipino workers abroad sent home 3.039 billion dollars in cash, and the 1.7 per cent rise from a year earlier was the weakest annual growth since February 2022. Over the first half the total reached 17.149 billion dollars, up 2.4 per cent. The central bank expects a rise of 2.7 per cent to 36.6 billion dollars for the full year.[2]
The deposit side grew 8.91 per cent while this transfer, which enters household income directly, grew 1.7 per cent. The distance between the two rates points to domestic lending having created most of what was added to the system. Another reading is available: the resource total covers securities portfolios, bond issuance and capital as well as loans, so the stock can also grow through revaluation. The central bank's release does not separate the two.[1], [2]
The lender of last resort is back in play
There is one more figure on the funding side. Banks drew 60.1 billion pesos through the discount window across 2025, central bank data showed, after taking no new loans from that door in 2024. Over the same stretch domestic liquidity stood at 20.108 trillion pesos, with annual growth easing to 7 per cent, its weakest in four months. At the end of December, 38 banks held 348.4 billion pesos of active credit lines.[3]
The last piece in this column asked which asset had created the deposits in July, and argued that the composition of the asset on the other side can change while deposits keep growing. The Philippine data puts the same question to a system that does not publish the other side at this frequency. The reopening of the lender of last resort's door after a year of disuse carries indirect information about that composition. If domestic liquidity growth stays around 7 per cent and cash remittances do not exceed the central bank's 2.7 per cent expectation, I expect the amount banks draw through the discount window not to return to zero.[3], [2], [4]