The value of deposits in banks operating in the Philippines jumped by 9 percent to reach P16.2 trillion in 2021 from P14.9 trillion in 2020, as the economy started to recover from pandemic-caused recession and also thanks to more small deposits.
The Philippine Deposit Insurance Corp. (PDIC) said in a statement the growth of deposits was driven mainly by increases in the segment with balances of more than P5 million.
The state firm said that such size of deposits accounted for 85 percent or P1.1 trillion of the P1.3 trillion additional domestic deposits.
Also, at the end of 2021, there were a total of 87.1 million accounts, also rising 9 percent from 80.1 million a year earlier.
PDIC said deposits with balances of P5,000 and less as well as savings deposits mostly accounted for the increase in the number of domestic deposit accounts.By type of deposits, demand and savings increased by 17.6 percent and 9.5 percent, respectively. Unlike savings deposits, demand deposits are not as readily accessible.
Combined, these two types of deposit accounted for the entire growth in domestic deposits.
On the other hand, long-term negotiable certificates of deposit and time deposits shrank by 5.9 percent and 1.4 percent, respectively.
“While the pandemic may have been an unpleasant wake-up call for many Filipinos, it has highlighted the importance of saving for the future and emergencies,” PDIC president Roberto B. Tan said.
“With more banks offering basic deposit accounts, saving money in banks becomes much easier and practical,” Tan said.
Further, with the growth in domestic deposits, insurance up to the maximum deposit insurance coverage of P500,000 per depositor per bank grew by 3 percent to P3.2 trillion in 2021. This represented one-fifth of total domestic deposits.
In terms of full coverage, the deposit insurance system achieved 97 percent or 84.3 million of domestic deposit accounts.
This was 9 percent better than the 77.4 million fully covered domestic deposits accounts in 2020.