The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) says the NBFI sector has seen a surge in profit before tax from P1.7 billion in 2019 to P2 billion in 2020.
In its Annual Report for the financial year ended March 31, 2021, NBFIRA said the return on assets also grew from 5.8 percent in 2019 to 6.8 percent in 2020. The regulator said severe contraction of global economic activity in the first half of 2020 was reflected by the decline in global GDP of 3.3 percent, a state of affairs worse than that recorded in the global economic and financial crisis of 2008/2009.
The Regulatory Authority said it adopted a facilitative regulatory approach in line with the international efforts to mitigate the effects of the pandemic on the performance of regulated businesses.
However in reporting period under review there was a 2.9 percent increase in active entities from 764 in 2019 to 786 in 2020, as well as a 2.5 percent growth in assets compared to the prior year.
“With total assets of P129 billion in 2020, the NBFI sector retained the dominant share of 54 percent in the domestic financial services sector. The sector’s capital and profitability positions were stable in spite of the COVID-19 pandemic. The capital position increased from P7.5 billion in 2019 to P9.2 billion in 2020 demonstrating the financial soundness and resilience of the sector. The profit before tax increased from P1.7 billion in 2019 to P2 billion in 2020, while the return on assets grew from 5.8 percent in 2019 to 6.8 percent in 2020,”said NBFIRA.
Despite the impact of the COVID-19 pandemic, the Regulatory Authority has remained a going concern.
“The Regulatory Authority generated total income amounting to P89,285,105 representing an increase of 2 percent from the prior year, as well as expenditure of P81,961,297 representing a slight increase in operating expenses by 0.2 percent. The net impact of the increase in revenues and stable costs resulted in a 24 percent growth in the surplus. As at March 31 March 2021, current assets were P29.9 million compared to current liabilities of P10.1 million. Despite the challenges brought about by the COVID-19 pandemic, the Regulatory Authority implemented the strategy, without sacrificing any of the key objectives and initiatives,” said the regulator.
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