Banking - Philippines

Philippines

In 2024, it is projected that the Banking market in the Philippines will reach a Net Interest Income of US$13.93bn.
Traditional Banks are expected to dominate this market segment with a projected market volume of US$13.60bn in the same year.
Looking ahead, the Net Interest Income is anticipated to exhibit an annual growth rate (CAGR 2024-2028) of -5.95%, resulting in a market volume of US$10.90bn by 2028.
When compared globally, it is noteworthy that in China will generate the largest amount of Net Interest Income, with a projected value of US$5,659.0bn in 2024.
The Philippines banking market is experiencing a surge in digital banking services, with more customers opting for online transactions and mobile banking applications.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the Retail & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in Philippines has been experiencing significant growth and development in recent years.

Customer preferences: Customers in Philippines are increasingly looking for digital banking solutions that offer convenience and accessibility. With the rise of smartphone usage and internet penetration in the country, there is a growing demand for online and mobile banking services. Customers prefer seamless and user-friendly digital platforms that allow them to perform a wide range of banking transactions anytime, anywhere.

Trends in the market: One of the key trends in the Banking market in Philippines is the expansion of digital banking services. Traditional brick-and-mortar banks are investing in technology to enhance their digital capabilities and reach a wider customer base. This trend is driven by the changing preferences of customers and the need for banks to stay competitive in a rapidly evolving market. Additionally, there is a growing trend towards financial inclusion, with banks offering services tailored to the needs of unbanked and underbanked populations in the country.

Local special circumstances: The geographical landscape of Philippines, with its numerous islands and remote areas, presents a unique challenge for the Banking market. As a result, there is a push towards developing innovative banking solutions that can reach customers in even the most remote locations. Mobile banking and agent banking services are becoming increasingly popular in addressing the issue of limited access to traditional bank branches in rural areas.

Underlying macroeconomic factors: The economic growth and stability in Philippines have also contributed to the development of the Banking market. A growing middle class, increasing disposable income, and favorable government policies have created a conducive environment for the expansion of banking services in the country. The stable economic conditions have boosted consumer confidence and encouraged more people to engage with formal banking institutions for their financial needs.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.