According also to the Bangko Sentral ng Pilipinas, the quality of their assets has not been impaired, their solvency ratio above standard and more important, they collectively posted healthy bottomlines.

“The seeds of earlier reforms nurtured by the currently improving macroeconomic environment and global investor sentiment to the Philippine sovereign continue to bear fruit as the Philippine financial system sustained its growth spurt for the first semester of 2011 amidst global economic slowdown,” BSP Gov. Amando M. Tetangco Jr. said of the system as a whole.

The system includes not just the banks but also nonbanks with quasibanking functions, nonstock savings and loan entities, the offshore banks and all trust entities.

Highlights of the report include high bank returns totaling P51.9 billion, or 28 percent higher than year ago profits of only P40.6 billion.

Total bank profits last year aggregated P91.2 billion.

Aggregate assets grew 11.5 percent to P7.01 trillion from year ago of only P6.29 trillion, mostly in the form of deposits (73.5 percent) and owners’ capital (12 percent).

Credit growth net of so-called interbank loans during the period averaged 17.1 percent to P3.04 trillion from only P2.60 trillion the previous year.

The quality of loans improved, with soured or nonperforming loans averaging lower to 3.1 percent of portfolio from year ago of 3.9 percent even as their nonperforming assets similarly improved to 3.6 percent from 4.4 percent.

The improving loan ratios were accompanied by higher loan loss provisions.

According to the BSP, the deposit base during the period grew by 8.5 percent and “an indication of continued confidence in the banking system.”

The collective assets-to-deposit ratio, an indicator of liquidity, rose to 57.1 percent from 54.9 percent during the period.

Best of all, their collective capital adequacy ratio, an indicator of capacity to sustain losses without the system having to recapitalize, stood higher at 17.4 percent from 16.5 percent, the BSP said.