BANK deposits as of September rose from a year ago, indicating the banking sector’s ability to meet rising demand for loans and support a more robust economic growth over the short term.
Besides indicating rising incomes, the Bangko Sentral ng Pilipinas said the increase in bank deposits reflected the general confidence of the public in the country’s banking sector.
According to the BSP’s latest “Report on Economic and Financial Developments,” which was released last week, the total peso-denominated deposits kept in banks hit P4.1 trillion as of the end of September, up from P3.8 trillion in the same period last year.
The central bank said that about half of the amount represented savings deposits while the other half consisted of time and demand deposits.
“Savings and time deposits remained the primary sources of funds for banks,” the BSP said in the report.
With the rising deposits, it said, banks were able to help fund higher consumption of households and investments by enterprises through the extension of more loans.
The BSP earlier reported the outstanding loans extended by universal and commercial banks, alone, grew by about 15 percent year-on-year to P3.08 trillion as of the end of October.
Officials said credit expansion in the country, fueled largely by loans from banks, helped boost domestic demand and the growth of the economy.
In the first three quarters, the economy, measured in terms of gross domestic product, grew by 6.5 percent from a year ago. This made the Philippines one of the fastest growing economies in Asia this year.
In the meantime, loan growth was aided by the move of several banks to expand operations.
Data from the BSP likewise showed that the banking sector’s operating network, which covers head offices and branches of all banks in the country, reached 9,207 as of the end of June, up from 8,915 as of the same period last year.
The increase in the banks’ operating network came despite the reduction in the number of industry players. This is because existing banks in the country had branched out.
Data showed that from the year-ago figure of 739, the number of banking institutions in the country fell to 712 as of the end of June.
The drop was attributed to the closure of small rural banks due mainly to insufficient capitalization and management problems.