Bank deposits up 10% in March

By Lawrence Agcaoili | The Philippine Star
July 05, 2023

MANILA, Philippines — More Filipinos are keeping their money in banks, showing their confidence in the industry despite the series of bank failures in the US, according to the Bangko Sentral ng Pilipinas (BSP).

Latest data from the central bank showed deposit growth accelerated to 9.8 percent in end-March from 7.2 percent in the same period last year, reflecting the sustained confidence of deposits amid the recovery from the COVID pandemic.

Total deposits of Philippine banks reached P17.7 trillion in end-March, mostly peso denominated and sourced from resident individuals and private corporations.

By deposit type, savings deposits had the largest share to total deposits at 46.2 percent or P8.2 trillion, followed by demand and negotiable order of withdrawal (NOW) accounts with a 28-percent share or P5 trillion, as well as time deposits with a 25-percent share at P4.4 trillion.

On the other hand, long-term negotiable certificates of time deposits (LTNCDs) had a minimal share at 0.8 percent or P136.5 billion.

Financial markets were rocked by the collapse of Silicon Valley Bank, Signature Bank and First Republic Bank in the US early this year.

In the Philippines, universal and commercial banks booked a 10.1 percent growth in deposits to hit P16.7 trillion as the industry cornered 94.3 percent of the total base as of end-March.

The thrift or mid-sized banks followed with P735.2 billion or 4.2 percent while rural and cooperative banks came next with P269.2 billion or 1.5 percent.

According to the BSP, the total assets of Philippine banks expanded by 11 percent to P23.1 trillion as of end-March and surpassed the pre-pandemic average growth of 10.98 percent.

The pace was also faster than the 6.9 percent recorded in March last year.

“The year-on-year asset growth was funded mainly by deposit generation,” the BSP said.

The capital adequacy ratio (CARs) of Philippine banks, as well as the universal and commercial banking industry on solo and consolidated bases were well above the minimum thresholds set by the BSP at 10 percent and the Bank for International Settlements (BIS) at eight percent.

Philippine banks recorded CARs of 15.7 percent on solo basis and 16.3 percent on consolidated basis as of end-2022.

On the other hand, big banks registered a CAR of 15.7 percent and 16.4 percent on solo and consolidated bases, respectively, as of end-March this year.

The number of banks operating in the country declined to 493 in end-March this year from 499 a year ago due to the continued consolidation of banks and the closure of weak players.

Meanwhile, the number of branches increased to 12,784 in end-March from 12,696 a year ago.

BSP Governor Eli Remolona said that the country’s banking system has remained strong.

“Capital and liquidity have been more than adequate. That’s why, in recovering from the pandemic, our banks have been a source of strength, unlike in previous crises, when they were a source of weakness,” Remolona said.