The Bangko Sentral ng Pilipinas (BSP) has reported that an increasing number of Filipinos opt to deposit their money in banks, demonstrating their unwavering trust in the industry despite the string of bank failures in the United States.
According to the latest data from the central bank, the growth rate of deposits escalated to 9.8 percent by the end of March, surpassing last year’s figure of 7.2 percent.
This growth reflects the sustained confidence in deposits as the country recovers from the impact of the COVID pandemic.
As of the end of March, the total deposits in Philippine banks amounted to a staggering P17.7 trillion, primarily consisting of peso-denominated deposits sourced from resident individuals and private corporations.
Among the various deposit types, savings deposits held the largest share, accounting for 46.2 percent or approximately P8.2 trillion.
Demand and negotiable order of withdrawal (NOW) accounts followed suit, contributing 28 percent or P5 trillion, while time deposits comprised 25 percent, equivalent to P4.4 trillion.
On the contrary, long-term negotiable certificates of time deposits (LTNCDs) constituted a minimal share of 0.8 percent or P136.5 billion.
Earlier this year, the financial markets experienced significant turbulence due to Silicon Valley Bank, Signature Bank, and First Republic Bank collapses in the United States.
However, Philippine universal and commercial banks defied these challenges by achieving a noteworthy 10.1 percent growth in deposits, amounting to P16.7 trillion by the end of March.
This growth allowed the industry to capture 94.3 percent of the overall deposit base.
Trailing behind were the thrift or mid-sized banks, which amassed P735.2 billion or 4.2 percent, while rural and cooperative banks followed closely with P269.2 billion or 1.5 percent.
The BSP disclosed that the total assets of Philippine banks experienced an 11 percent expansion, reaching P23.1 trillion by the end of March.
This growth rate outperformed the pre-pandemic average of 10.98 percent and surpassed the 6.9 percent recorded in March of the previous year.
The generation of deposits primarily drove the year-on-year asset growth, as stated by the BSP.
Moreover, the capital adequacy ratios (CARs) of Philippine banks, including those of the universal and commercial banking industry on both solo and consolidated bases, exceeded the minimum thresholds established by the BSP (10 percent) and the Bank for International Settlements (BIS) (eight percent).
As of the end of 2022, Philippine banks recorded CARs of 15.7 percent on a solo basis and 16.3 percent on a consolidated basis.
Similarly, large banks reported CARs of 15.7 percent and 16.4 percent on solo and consolidated bases, respectively, by the end of March this year.
The number of banks operating in the Philippines diminished to 493 by the end of March this year, compared to 499 a year ago, primarily due to ongoing bank consolidations and the closure of financially weak institutions.
Conversely, the number of branches increased to 12,784 by the end of March, up from 12,696 the previous year.
BSP Governor Eli Remolona emphasized that the country’s banking system remains robust, with sufficient capital and liquidity.
He highlighted that, unlike previous crises when banks served as a source of weakness, they have emerged as a source of strength in the recovery from the pandemic.
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