The local financial system’s resources increased by nearly a fifth year-on-year last November, reflecting the abundance of cash in the economy.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that the resources of banks and non-banks rose to P12.26 trillion at the end of November. This represents a 19.01 percent increase from the same month the year before.
Month-on-month, the industry’s resources, which account for deposits and profits, rose by P557 billion.
The resources of banks alone reached P10 trillion—up 22 percent over the same period the year before. Bulk of this was held by universal and commercial banks. The sector’s resources reached P9.02 trillion or 90 percent of the total.
Resources of thrift banks totaled P788.2 billion, while rural banks had P190.1 billion.
Meanwhile, non-banks’ resources reached P2.256 trillion. Non-banks include insurance firms, pawnshops, and lending companies.
The increase in the financial system’s resources came about just as the deadline for the removal of non-pooled funds in the BSP’s special deposit accounts (SDA) lapsed.
The withdrawal of individual investments from SDAs was part of the BSP’s refinements for the deposit facility, which was originally conceived as a tool for mopping up excess liquidity in the financial system.
Money in SDAs peaked at nearly P2 trillion in the first half of 2013 as investors had to park their funds in the deposit facility because of the scarcity of risk-free investment opportunities in the market.
The week after the ban on individual investments in SDAs took effect, money in the window dropped to P1.412 trillion—the lowest since June of 2011, when SDAs stood at P1.39 trillion. Latest data from the BSP showed that money in SDAs at the end of last year fell further to P1.34 trillion.
BSP Deputy Governor Diwa C. Guinigundo, head of the regulator’s monetary stability sector, said most of the cash withdrawn from SDAs were transferred to time deposit accounts in local banks.