Bank deposits up by 9.3% to P4T as of end-April
Deposits placed in banks further increased in April, boosting optimism among monetary officials that the resources of the banking sector will remain sufficient to help fuel the growth of the economy.
Data from the Bangko Sentral ng Pilipinas showed that the total peso-denominated deposits in the country’s banking system reached P4 trillion as of end-April, up by 9.3 percent from P3.7 trillion in the same period last year.
About half of the deposits were regular savings deposits, the BSP said. The other half represents demand and time deposits, it added.
Officials said the growing deposits reflected the confidence of the people in the banking sector in general.
The central bank said public confidence in the banking sector was anchored on a generally healthy state of the country’s banking sector.
Given that deposits from individual and corporate clients of banks account for the bulk of the banking sector’s resources, monetary officials said there was sufficient liquidity in the banking sector to support the growth of the economy.
The growing resources of banks are the key reason why loans extended to individual and corporate borrowers are rising as well, the BSP said.
Loans to individuals are seen to continue fueling consumption, while those extended to corporate entities are expected to lead to more job-generating investments.
The BSP earlier reported that outstanding loans extended by universal and commercial banks alone amounted to P2.98 trillion as of end of June, up by 14.9 percent from P2.59 trillion as of the same period last year. The rate of increase in June was faster than the 14.7 percent in May.
Officials said the increase in bank lending was partly credited for the economy’s better-than-expected growth so far this year.
The Philippine economy grew by 6.4 percent in the first quarter, faster than the 4.9 percent registered in the same period last year. It was also the second-fastest growth rate for the period in Asia, next to China’s 8.1 percent.
However, observers said that despite the growth in lending, financial institutions are still not lending enough.
Economists said that banks had enormous idle resources that they could use for lending.
In the Philippines, the loans-to-deposit ratios of many banks range from 60 to 70 percent. In some countries in the region, the ratio goes as high as over 90 percent.
BSP officials agree to this, noting, however, that demand for loans was not also growing as fast as it should.
They said there should be more investment initiatives so that the economy could maximize the potential of bank resources as a contributor to the growth of the economy.
