Number of banks down in 2013

MANILA, Philippines - The number of banks declined to 673 in 2013 from 696 in the previous year, according to the central bank’s latest Report on Economic and Financial Developments.

The BSP attributed the drop to the “continued consolidation of banks, as well as the exit of weaker players in the banking system.”

The number of universal and commercial banks fell to 36 from 37 after the merger of Philippine National Bank and Allied Banking Corp., while thrift banks rose to 71 from 70.

The number of rural banks, meanwhile, shrinked to 566 last year from 589 in 2012 amid foreclosures of problematic banks and consolidations with other banks.

However, the central bank said bank branches continued to expand to 9,262 in 2013 from the 8,714 seen in end-2012.

The BSP said this was driven largely by an increase in the branches of universal and commercial banks, and thrift banks amid aggressive expansion of operations.

Branches of universal and commercial banks went up to 5,425 from 5,108, while thrift banks grew their branches to 1,757 from 1,549. Rural bank also saw their branches increase to 2,080 from 2,073.

The rise in the number of banking institutions was backed by a jump in the total resources of the banking system by nine percent to P10.3 trillion last year.

“The increase could be traced to the growth in loans, securities and other shares and non-financial assets,” the central bank said.

Universal and commercial banks made up more than 90 percent of the total resources of the banking system, the BSP noted.

“Savings and time deposits remained the primary sources of funds for banks,” the BSP said.

Total deposits as of end-2013 jumped 36 percent to P6.1 trillion as funds flushed out of the BSP’s Special Deposit Accounts found their way into time deposits, among others.

The central bank last year cut its interest rates and restricted access to the SDA facility so funds will be invested in other instruments and projects beneficial to the economy.

Savings deposits, which made up nearly half of the banks’ funding base, rose 32.8 percent last year. Demand deposits also grew 34.1 percent, while time deposits climbed 44.2 percent.