Bank deposits up to P6.8 T in July

MANILA, Philippines - Bank deposits rose 7.3 percent in the first seven months, boosting the total resources of the country’s banking industry, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Based on the central bank’s Third Quarter 2015 Inflation Report, total bank deposits amounted to P6.8 trillion as of end-July, P500 billion higher compared to P6.3 trillion in end July last year.

The BSP said the growth in deposits recorded in end-July was slower than the 8.2 percent growth posted in the previous month.

The central bank said savings deposits increased nine percent in end-July while demand deposits jumped 12.3 percent.

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

Likewise, foreign currency deposits owned by residents, grew 9.6 percent year-on-year.

On the other hand, time deposits declined marginally by 0.2 percent in the first seven months.

“The Philippine banking system remains solid. Banks’ balance sheets were marked by a sustained growth in assets and deposits,” it said.

The report said the total resources of the country’s banking system went up 8.6 percent to P11.5 trillion in end June from P10.6 trillion in end June last year.

Bank resources accounted for 88.8 percent of gross domestic product (GDP) in the first half.

The BSP added banks continued to dominate the financial sector as universal and commercial banks accounted for 90 percent of total banks’ assets.

It added asset quality indicators also continued to improve while capital adequacy ratios remained above international standards, even with the implementation of the tighter Basel III framework.

The Philippine banking system’s gross non-performing loan (GNPL) ratio improved to 2.4 percent as of end-June from 2.7 percent in end June last year.

“Banks’ initiatives to improve their asset quality along with prudent lending regulations helped maintain the GNPL ratio to a level below its pre-Asian crisis at 3.5 percent,” the BSP said.

The net non-performing loan ratio also decreased slightly to 0.6 percent from the 0.7 percent.