PDIC: Savings deposit growth up 8.9% in Q1

CEBU, Philippines - The Filipinos are slowly embracing the culture of saving as manifested in the current report of the Philippine Deposit Insurance Corporation (PDIC) that showed an 8.9 percent increase in deposits in the banking sector during the first quarter this year compared to the same period in 2010.

As of end-March this year, deposits in Philippine banks reached P5 trillion. However, the growth is marginally slower than the nine percent registered in the same period last year.

Meanwhile, deposits in thrift banks also posted a double-digit growth at 10 percent from 6.7 percent as of March 2010.

PDIC president Valentin A. Araneta said that the continued growth of bank deposits is an indication of the continued confidence of the public in the country’s banking system as well as an indication of strengthening pre-disposition to “save for the rainy days” among Filipinos.

On the other hand, PDIC record showed that in the first three months of this year, deposits in the rural banking institutions grew at a slower rate of 6.2 percent from 12.2 percent in the same period last year.

Commercial banks hold the largest share of deposits in the Philippine banking system at 88.2 percent of the total deposits. The deposit share of thrift banks was 9.3 percent while that of rural banks was 2.48 percent.

Savings accounts still dominate all deposit types at 47.2 percent, followed by time and Long-Term Negotiable Certificate of Deposits (LTNCDs) at 33.7 percent.

Demand and “now” deposits only account for 19.1 percent of the total number of deposit accounts.

Savings accounts and Demand and “now” deposits both grew double digit at 12.6 percent and 10.7 percent, respectively, whereas time deposits grew by only 3.4 percent.

Although time deposits grew slowest in KBs, the growth of savings deposits was highest in the big banks at 13.8 percent.

The aggregate deposit amount maintained by Individuals stood at 56.2 percent of the total deposit amount, almost twice the amount of deposits maintained in private corporations.

Private corporations and government deposits accounted for 29.7 percent and 11 percent, respectively, of the total deposit amounts.

PDIC record further revealed that 97 percent of the total number of accounts amounting to P884.86 billion are fully covered up to the maximum deposit insurance coverage (MDIC) of P500,000. (FREEMAN)