Bank deposits in the country grew further in the third quarter due to the modest rise in income levels and sustained public confidence in the banking sector, regulators said.
The rise in deposits as of end-September last year would boost lending activities of banks this year, thereby supporting efforts to accelerate growth in consumption and investments.
Data from the Philippine Deposit Insurance Corp. (PDIC) showed that as of end-September last year, total deposits amounted to P5.1 trillion, rising by about 6 percent from P4.8 trillion in the same period the previous year.
The deposits are placed in 41.9 million accounts, PDIC said.
Also, about 97 percent of deposit accounts were fully covered by deposit insurance because the amount deposited in each of these accounts amounted P500,000 or less, the regulator said.
Under PDIC’s charter, deposits worth at P500,000 or below are covered by insurance.
Nearly half of the total deposits, or P2.43 trillion, are in the form of regular savings. The balance is composed of long-term deposits.
Moreover, more than half of the total deposits, or P2.79 trillion, were placed by individual clients. Private firms and government institutions accounted for the rest.
Nestor Espenilla Jr., deputy governor of the Bangko Sentral ng Pilipinas, earlier said bank lending in 2012 would remain robust this year.
The central bank said credit growth in 2011 accelerated to its fastest pace in over two years on the back of rising liquidity of banks aided by growing deposits from the public.
The BSP earlier reported that outstanding loans from universal and commercial banks amounted to P2.75 trillion as of end-November, rising by 22.5 percent from P2.24 trillion as of the same period the previous year.
Espenilla said that, despite the substantial rise in loans last year, banks could still afford to lend more.
Industry players agreed, noting that most banks have appetite for higher lending this year.
Aurelio Montinola, president of the Bankers Association of the Philippines, said credit would likely post another double-digit expansion in 2012, settling anywhere between 10 and 15 percent in the first quarter.
Montinola, who is also president of the Bank of the Philippine Islands, said banks would likely lend more this year to counter the dampening effect of lower interest rates on income.