DESPITE the challenging global economic environment amid renewed uncertainties, the Philippine banking system remained sound and stable as shown by expanding resource base, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.

Data from the BSP showed that total resources of the banking system rose by 6.36 percent to P7.501 trillion at end-November 2011 from P7.052 trillion in the same period in 2010.

Universal and commercial banks, which accounted for almost 90 percent of the total resources, continued to drive the growth in the sector, expanding by 7.12 percent to P6.721 trillion from P6.274 trillion over the same period in 2010.

Similarly, thrift and savings banks attributed at least P595.72 billion, but this was lower by 0.43 percent than the P598.35 billion in the same period in 2010.

The BSP noted that deposit liabilities have remained the primary source of funds for banks, mirroring sustained depositors’ confidence in the sector despite closures of small players during the period.

Savings deposit, both in peso and foreign currency, accounted for nearly half of the funding base, followed by demand and negotiable order of withdrawal deposits.

Deposit levels grew by 7.3 percent to P3.9 trillion at end-November 2011 from P3.6 trillion over the same period in 2010.

The banking system’s capitalization also remained robust, averaging 16.5 percent on solo basis and 17.4 percent on consolidated basis as of end-March 2011. Both solo and consolidated bases exceeded the BSP’s minimum requirement of 10 percent and the Basel Accord’s standard ratio of 8 percent.

According to the BSP, the sustained strength of the banking system’s capital adequacy ratio (CAR) resulted from the higher growth rate of qualifying capital vis-‡-vis that of risk weighted assets.

The Philippine banking system’s CAR on consolidated basis at 17.4 percent was comparatively higher than those of Indonesia (17.2 percent), Thailand (16.2 percent), Malaysia (14.8 percent) and South Korea (14.5 percent).

CAR is a measure of a bank’s solvency. This ratio is used to protect depositors and promote the stability and efficiency of the financial system.