PDIC reports 3.2% growth in deposits

MANILA, Philippines - Total bank deposits continued to post healthy growth after inching up 3.2 percent in the first quarter of the year as more and more Filipinos are saving in the formal banking sector amid the growing domestic economy, the state-run Philippine Deposit Insurance Corp. (PDIC) reported over the weekend.

Data released by PDIC showed that peso- and foreign currency-denominated deposits amounted to P5.164 trillion from January to March this year or P161 billion higher than the P5.003 trillion recorded in the same period last year.

Total peso-denominated deposits in the first quarter went up about four percent to P4.087 trillion from P3.93 trillion in the same quarter last year as the number of accounts increased 8.4 percent to 38.38 million from 35.39 million.

On the other hand, the amount of foreign currency denominated deposits was steady at P1.077 trillion from P1.072 trillion as the number of accounts increased 5.4 percent to 1.759 million from 1.669 million.

Of the total deposits, data showed that commercial banks accounted for 88.2 percent or P4.55 trillion consisting of 30.3 million accounts, followed by thrift banks with 9.3 percent or P480 billion covering 4.3 million accounts, and rural banks with 2.5 percent or P130 billion comprising of 5.5 million accounts.

PDIC president Valentin Araneta attributed the steady increase in total deposits to the country’s improving domestic economy after the gross domestic product (GDP) growth accelerated to 6.4 percent in the first quarter from the revised four percent in the fourth quarter.

He also pointed out that the growing deposit base is indicative of the continued confidence of the public in the banking system and the Filipinos’ predisposition to save for the rainy days.

 “As the economy continues to grow, wealth is created,” he stressed.

Data showed that savings deposits climbed by 5.3 percent to P2.485 trillion in the first quarter of the year and accounted for 48.2 percent of the total deposits while demand deposits went up by 12.8 percent to P1.07 trillion from P955 billion for a share of 20.7 percent.

On the other hand, time deposits retreated by 5.8 percent to P1.554 trillion from P1.65 trillion and cornering a share of 30.1 percent of the total deposits.

According to Araneta, about 97 percent or 38.92 million of the 40.1 million total number of accounts are fully covered up to the maximum deposit insurance coverage (MDIC) of P500,000.

The agency’s deposit insurance fund posted a double-digit growth of 10.3 percent to P74.89 billion or 4.9 percent of the country’s total insured deposits as of end-May from P67.89 billion or 4.8 percent of the total insured deposits in end-May last year.

The DIF serves as the funds backing up the insured deposits of the banking system. It is invested in Philippine government securities and government guaranteed instruments prescribed in the Charter.