Its rising incomes should see Philippine banks lend more as the Philippine economy continues on its growth curve.
The combined income of universal and commercial banks rose 15% to US$2.2 billion in 2011 from US$1.9 billion in 2010 as increased economic activity boosted demand for banking services.
The Bangko Sentral ng Pilipinas, the central bank, said the higher profit was due mostly to increased lending since the expanding economy required more loans from banks.
It reported that outstanding loans from the banks grew by 19.3% to US$65 billion in 2011, significantly higher than the 10% growth in 2010.
Non-interest income grew by a billion pesos to US$2.8 billion.
BSP Governor Amando Tetangco Jr. said the Philippines hopes to soon get investment grade rating because of its favorable macroeconomic fundamentals and stable banking system.
He urged banks to lend more given their profitability and rising resources that are also being increased by more deposits from the public.
Based on industry estimates, outstanding bank loans are equivalent to between 60 and 70% of deposits kept in banks.
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