| Photo by Kanchanarra on Unsplash
The BSP, citing its “Report on the Philippine Financial System for the First Semester of 2025,” said Philippine banks posted P28.2 trillion in assets as of end-June 2025, up 7.7% year-on-year.
“The banking system’s solid performance underscores its strength in seizing opportunities, navigating emerging risks, driving innovation, and championing inclusive and sustainable growth,” said BSP Governor Eli Remolona Jr.
The top 5 banks in the Philippines by assets in 2024 were BDO Unibank, Land Bank of the Philippines, Bank of the Philippine Islands (BPI), Metropolitan Bank & Trust Company (Metrobank), and China Banking Corporation. These banks also reported significant net income for the year, with BDO Unibank earning a record 82 billion pesos and others posting strong profitability.
BDO Unibank consistently leads in both assets and net income, maintaining its position as the country’s largest and most profitable bank.
The top five banks control a substantial share of total assets in the Philippine banking sector, reflecting market dominance. PNB reported notable profitability growth, increasing net income by 18% year-on-year. The total assets of all banks in the Philippines as of mid-2025 reached PHP 27.7 trillion.
In the Philippines, banks considered “too big to fail” are officially designated as Domestic Systemically Important Banks (D-SIBs) by the Bangko Sentral ng Pilipinas (BSP). These banks are deemed systemically crucial because their failure would cause significant disruptions to the broader financial system and economy.
The BSP designates D-SIBs based on factors like size, interconnectedness with other financial institutions, market reliance, substitutability, and operational complexity. These banks are required to maintain higher capital buffers and meet stricter supervisory requirements to lower the probability of systemic failure. Though BSP does not always publicly list all D-SIBs, the largest banks by assets are generally considered “too big to fail” in the Philippine context.
The Philippine government’s approach to supporting failing systemically important banks combines intensive supervision, mandatory recovery plans, emergency liquidity provision, PCA mechanisms, deposit insurance, and regulatory adjustments during crises. These measures aim to protect the overall financial system and economy from the contagion effects of significant bank failures while minimizing moral hazard and ensuring transparency in resolution processes.
Early warning indicators that trigger a bank’s recovery plan are carefully defined quantitative and qualitative measures designed to signal financial stress before it becomes critical. These indicators serve as timely alerts to senior management and the board, enabling them to evaluate the situation and implement recovery actions to restore the bank’s viability.
Activation of a bank’s recovery plan relies on a well-defined set of early warning indicators covering capital, liquidity, profitability, asset quality, market conditions, funding, and operational risks. These indicators provide actionable signals enabling proactive management intervention to avoid insolvency or severe distress.
In real estate, the Villar valuation controversy showed clear signs of distress and possible fraud in its financial reporting.
Villar Land reported an unprecedented profit of nearly PHP 1 trillion for 2024, driven almost entirely by a PHP 1.33 trillion land revaluation of a 366-hectare property purchased for only PHP 5.2 billion from Villar-controlled affiliates. It represented a staggering 25,000% increase in asset value within months.
But the Filipino must soldier on. The next financial crisis may be upon us. The republic has withstood worse. …. The next generation must yet again be the greatest generation to restore our Philippines to its rightful place among nations. …
The external auditor, Punongbayan & Araullo (Grant Thornton affiliate), refused to sign off on this highly inflated property valuation, leading to the suspension of trading in Villar Land shares since May 2025 due to the firm’s failure to submit audited financial reports.
After intense regulatory pressure from the Securities and Exchange Commission (SEC), Villar Land reluctantly agreed to write down the land value by 99% to about PHP 8.6 billion, close to its cost. Still, the delay raised serious concerns about transparency and due diligence.
The auditor rejected Villar Land’s valuation primarily because the massive revaluation lacked sufficient reliable evidence and independent confirmation. The auditor’s insistence on multiple appraisals and conservative accounting reflected their duty to ensure truthful, transparent financial disclosures, ultimately leading Villar Land to accept a valuation close to cost after regulatory and market pressure.
The Metro Manila condominium market is currently grappling with significant oversupply, fueled by developers’ marketing gimmicks that mask deeper valuation and demand distress.
Price-to-Income Growth Disparity, Rental Yield Compression, Secondary Market Price Discounts vs Pre-Selling, High Transaction Costs and Inflated Zonal Values, Oversupply and Vacancy Rates, Price-to-Rent Ratio and Rental Market Decline, Sales Decline and Market Absorption Period, are metrics which collectively indicate distress in Metro Manila condominium valuations caused by affordability gaps, inventory oversupply, weakened rental returns, market distortions in pricing, and structural changes in buyer demand. They highlight risks of overvaluation, liquidity strains, and a pending price correction in the sector.
The heavy reliance on promotional gimmicks to stimulate demand signals underlying valuation distress in the Metro Manila condo market, where supply outpaces real buying interest. This results in price distortions, market inefficiencies, and potentially overstated asset values masking the true market condition.
The Bureau of Internal Revenue (BIR) in the Philippines is expected to miss its 2025 tax collection target of PHP 3.219 trillion. The BIR is facing an uphill battle to meet its 2025 revenue targets due to slowed government spending, partial shortfalls in key tax categories, and the lingering impact of compliance issues and scandals affecting public expenditures and overall economic activity.
The Philippine Stock Exchange Index (PSEi) recently hit a fresh five-year low, closing at around 5,700 points in early November 2025. It is the lowest level since around mid-2020 and reflects a declining trend over recent months. The PSEi is expected to remain volatile as investors closely monitor economic data releases, government spending plans, and global market trends. Analysts forecast a cautious recovery in the coming quarters contingent on improved economic fundamentals and policy support.
The Philippine peso has recently depreciated significantly against the US dollar, reaching record lows of around 59 pesos per dollar in late October and early November 2025. This depreciation followed a period of tame inflation, which remained within the central bank’s target range, prompting the Bangko Sentral ng Pilipinas (BSP) to cut policy rates multiple times in 2025, with more cuts anticipated. The peso’s weakened state is partly due to local factors such as controversies involving government projects, trade deficits influenced by US tariffs, and a global trade slowdown, as well as external pressures from a stronger US dollar. Despite the depreciation, economic fundamentals and potential central bank intervention may limit further declines to below the 59-60 peso-per-dollar range. The BSP maintains that peso values are mainly market-driven but is signaling cautious monetary easing amid easing inflation and slowing economic growth prospects.
The series of natural disasters is exacerbating the financial turmoil. Recent corruption scandals are eroding investor confidence.
Last but no less significant, the 20th Congress has reconvened. Further political upheaval ahead.
But the Filipino must soldier on. The next financial crisis may be upon us. The republic has withstood worse. For now, apologies from generations past to the generations of the next—a mess we leave you. The next generation must yet again be the greatest generation to restore our Philippines to its rightful place among nations. May God find favor in your pursuits.
ABOUT THE AUTHOR: Dr. Crispin Fernandez advocates for overseas Filipinos, public health, transformative political change, and patriotic economics. He is also a community organizer, leader, and freelance writer.
