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The paper tracks the growth, drivers and regulatory pressures on off-balance sheet (OBS) activities of Philippine commercial banks in the post-Asian financial crisis period. OBS refers to those activities that generate income without expanding or appearing on the asset portion of the balance sheet. Since these involve the creation of contingent claims against the banks, they are also referred to as contingent accounts. Using Bangko Sentral ng Pilipinas (BSP) data for the period 1998 to 2005, the study employs financial analysis and panel regression to track the growth and investigate the drivers of banks' OBS activities. Liberalization of foreign bank entry in 1994 brought in financial innovation in the Philippines in the form of extensive OBS activities. However, non-interest income as a percent of both interest and non-interest incomes generated from OBS activities of foreign banks are almost equal to their local expanded commercial bank counterparts, suggesting that local banks can earn as much as the foreign banks through engagement in less risky fee-based activities. The varying risk profile of OBS activities gives rise to measurement issues that challenge regulatory conventions.