Thrift banking sector anticipates continued asset growth this year driven by expanding financial inclusion and rising credit demand.
As of April, core lending surpassed 1 trillion pesos and total assets reached 1.4 trillion pesos, with the sector’s capital adequacy ratio staying above 17%.
Leaders highlighted expectations for similar growth, citing new services that will increase credit needs, and noted a 25% year‑on‑year rise in both assets and loan volume through April.
Despite inflation pressures, loan‑loss levels are projected to remain steady, and no additional provisioning is foreseen.
The industry reports full compliance with the Anti‑Financial Account Scamming Act requirements, though not all members have automated fraud‑management systems in place.
Implementation is ongoing across member institutions.
Members are also preparing to meet the central bank’s artificial‑intelligence governance guidelines.
A recent directive to lower retail digital fund‑transfer fees may reduce revenue, but higher transaction volumes are expected to offset the impact.
To remain competitive with digital‑focused banks and fintech firms, thrift banks are accelerating digital transformation and enhancing service delivery.
Executives emphasized the need to balance traditional relationship‑based banking with digital innovation and responsible AI use, describing the future as a hybrid model.
The central bank’s decision to extend the maximum repayment period for salary‑based consumption loans to seven years received support, with the extension intended for emergency situations such as medical expenses.
Thrift banks, which serve many salary‑loan borrowers including teachers, aim to avoid over‑burdening customers while applying prudence to loan terms based on purpose.
Industry officials described the seven‑year limit as a compromise that expands flexibility without encouraging excessive borrowing, noting calls for a ten‑year term were declined.
Salary loans now comprise more than half of the sector’s individual loan portfolio, reflecting a shift toward lower‑risk products linked to payroll deductions.
In the first quarter, disbursements of salary‑based loans rose 59.6% year over year to 393.765 billion pesos.
