Financial institutions continue to rise

According to the Institute for Development and Econometric Analysis, Inc. latest Industry Trends, as of the end of the third quarter of 2013, there were 27,764 financial institutions in the Philippines, 7,056 head offices and 20,708 branches or agencies. This is 3.9 percent greater than last year’s figure. The number of universal banks, thrift banks and non-banks rose by 5.9 percent, 8.6 percent, and 3.88 percent, respectively. However, the number of rural banks declined by 2.07 percent.

Total resources of the Philippine financial system amounted to Php12.67 trillion as of the end of the 2013, a 19.3 percent growth from total resources as of the end of 2012. Growth has certainly been sustained from the performance of recent years.

Total loan portfolio of the Philippine banking system reached P4.89tn in 2013. TLP increased by 12.41 percent in 2012 and 15.69 percent in 2013. High growth that leads to more economic activity, which the country experienced in the last two years, means greater demand for investable funds.

Exports of insurance amounted to Php1.66 billion in 2013, a 7.3 percent decline from exports last year. However, exports of insurance rose by 56.8 percent in 2012. NSCB’s national accounts do not specify exports of financial services aside from insurance.

Per same published report, according to the results of the first Consumer Finance Survey, which the BSP conducted in 2009, only 21.5 percent of Filipino households have a deposit account. That they did not have enough money for bank deposits was indicated by 92.8 percent of those without deposit accounts as the main reason why they do not own an account. For those who own deposit accounts, 39.8 percent of the deposit accounts do not pay interest.

Practically all the deposit accounts—99.3 percent and 98.1 percent--are maintained in the Philippines and in peso, respectively. Commercial banks hold 77.3 percent of the deposit accounts of Filipino households who have accounts. Of the households with deposit accounts, 34.4 percent chose to put their biggest account in a particular bank or institution because the bank or institution is close to home. Another 19.3 percent made their choice because their employer or business uses the bank or institution.

Deposit liabilities of the entire Philippine banking system amounted to Php7.6 trillion as of the end of 2013. The amount of deposit liabilities grew by 7.0 percent in 2012 and by 32.2 percent in 2013. Rising incomes means rising demand for deposits.

Only an extremely small 0.4 percent of Filipino households own shares in mutual funds, unit investment trust funds (UITFs), publicly traded stocks, bonds or any other type of managed investment account besides a pension or insurance plan.

Furthermore, the service’s imports were Php13.96 billion in the same year, a 6.1 percent decline from imports last year. Imports also slightly went down in 2012 as well. NSCB’s national accounts do not specify imports of financial services aside from insurance according to the researchers of IDEA. 

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