Money kept by the public in Philippine banks grew at a faster pace in the second quarter, mirroring the economy’s improved performance, official data showed.
In a report, the Bangko Sentral ng Pilipinas (BSP) said growth was driven mainly by an increase in savings and demand deposits, which are cheaper, albeit less stable, sources of funding for local banks.
At the end of June, total savings and time deposits in the banking system rose 8.2 percent to P6.8 trillion. The pace of growth was faster than the 7.5-percent expansion recorded at the end of March this year.
Savings and demand deposits expanded by 8.8 percent and 13 percent, respectively, while time deposits grew by 2.9 percent during the review period. Meanwhile, foreign currency-denominated deposits owned by Philippine residents grew by 9.5 percent, year-on-year.
The rise in deposits took place amid the banking sector’s continued expansion.
Banks had 10,528 offices at the end of June 2015. Bank offices include headquarters, branches and other establishments that offer various financial services. This was 4 percent higher than last year’s 10,120 offices.
The sector’s expansion came despite a decline in the total number of banks operating in the country. The number of universal and commercial banks was steady at 36, while the number of thrift banks rose by one to 70. The number of rural and cooperative banks at the end of June dropped to 532 from last year’s 558.
The BSP said the decline in the number of banks in the country was a reflection of “continued consolidation of banks as well as the exit of weaker players in the banking system.”
The banking system’s total resources grew by 8.6 percent to P11.5 trillion as of end-June 2015 from P10.6 trillion a year ago. The slight growth deceleration from 8.7 percent in the first quarter of 2015 “could be traced to the slower growth of bank lending,” the BSP said.