Philippine banking industry deposits hit PHP 19.6 trillion

The Philippine banking system’s total deposits hit PHP 19.58 trillion as of end-September, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The banking sector’s total deposits rose by 7% from PHP 18.29 trillion recorded in the same period a year ago.

The number of deposit accounts jumped by 17.5% to 138.33 million as of end-September from 117.75 million a year prior.

Likewise, the number of depositors stood at 124.38 million, up by 14.8% from 108.34 million in the previous year.

Big banks’ deposits, which accounted for 93.8% of the total, rose by 6.9% year on year to PHP 18.36 trillion at end-September from PHP 17.18 trillion.

BSP data showed universal and commercial banks had a total of 91.39 million accounts and 83.72 million depositors.

Meanwhile, deposits of thrift banks increased by 5.5% to PHP 804.12 billion from PHP 761.96 billion a year ago. Thrift bank deposit accounts stood at 7.16 million, with 6.9 million depositors.

Rural and cooperative banks recorded deposits of PHP 327.26 billion, rising by 15.5% from PHP 283.23 billion. These banks had a total of 23.53 million deposit accounts and 23.2 million depositors.

Data from the central bank showed digital banks received PHP 87.39 billion in total deposits at end-September, up by 34% from PHP 65.18 billion a year ago.

The number of deposit accounts from digital banks hit 16.25 million with 10.55 million depositors.

By type, savings deposits comprised 43.4% of the banking sector’s total deposits, equivalent to PHP 8.5 trillion.

This was followed by regular savings (PHP 6.92 trillion), time certificate of deposits (PHP 5.67 trillion), demand deposits (PHP 5.38 trillion), kiddie and teen savings (PHP 53.99 billion), and basic deposits (PHP 28.52 billion).

“The increase in online business transactions led to the faster growth in online banking accounts and e-wallets, all of which led to greater financial inclusion and also led to the corresponding increase in deposit accounts, especially through digital banking channels,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Earlier data from the BSP showed the share of online payments in the total volume of monthly retail transactions rose to 52.8% last year.

Mr. Ricafort also noted the boom in digital transactions and transfers through InstaPay and PESONet as an alternative to bank checks.

“This (necessitates) the creation of more deposit accounts to facilitate more e-commerce and digital banking transactions,” he added.

Separate data from the BSP showed the value of transactions done through the automated clearing houses InstaPay and PESONet jumped by 34.6% to PHP 13.99 trillion as of October.

“On top of the rapid growth in digital business transactions in the local economy, the faster growth in deposits is also consistent with the much faster growth in bank loans,” he added.

Bank lending jumped by 11% year on year to P12.4 trillion in September, its fastest growth since the 13.7% posted in December 2022.

The BSP earlier attributed the growth in deposits to “strong depositor confidence, particularly from resident individuals and private corporations.”

This allows banks to have a reliable funding source that “shields the banking system from significant funding withdrawals arising from global financial market fluctuations and reduces banks’ exchange rate risk and vulnerability,” it said in its latest report on the Philippine financial system. – Luisa Maria Jacinta C. Jocson, Reporter