PDIC: Deposits up 3.2% in Q1

Deposits placed in the country’s banking system grew by the end of the first quarter from a year ago as rising income prompted more people and companies to save.

The Philippine Deposit Insurance Corp. reported that, as of end-March, total money placed by depositors in banks reached P5.16 trillion—up by 3.2 percent from the P5 trillion of the same period last year.

The rise in deposits came about just as the economy grew during the period. Industry players said that the performance of the economy significantly affects banking activities, particularly deposits.

But the increase in deposits in the first three months was slower than the growth of the economy. The economy, measured in terms of gross domestic product, grew in real terms by 6.4 percent from a year ago on the back of higher government spending and recovery in export earnings.

Industry sources said that because economic growth outpaced faster than the increase in deposits, this meant that portions of the public’s income had been used for investments rather than savings.

PDIC data showed that there were 40 million deposit accounts as of end-March.

Of the total deposits, the bulk of P4.09 trillion was denominated in pesos. The rest were denominated in various foreign currencies led by the US dollar.

Commercial banks cornered P4.55 trillion of total deposits. Thrift banks accounted for nearly P159 billion, while rural banks accounted for the rest.

Officials from the Bangko Sentral ng Pilipinas said the continuing rise in bank deposits served to beef up the resources of the country’s banking system, further stimulating growth of the economy.

Due to the increase in deposits, banks are also expected to increase lending to households and corporate entities this year, thereby boosting consumption and investments, the regulators said.

As of April, commercial bank lending grew by nearly 20 percent.

The Bankers Association of the Philippines (BAP) expects the double-digit rise in lending to continue throughout the year. It said commercial banks could post a 10- to 15-percent annual growth rate in outstanding loans for the full year.—Michelle V. Remo