Total bank deposits up 5% to P6.7T

MANILA, Philippines - Savings and time deposits continued to be the main sources of funds for banks in the fourth quarter despite moderate growth, the Bangko Sentral ng Pilipinas said.

Total deposits went up five percent to P6.7 trillion in end-December from P6.4 trillion in the third quarter, central bank data showed.

“The modest growth could be attributed in part to the increase in placements of trust entities in the BSP’s special deposit account facility relative to the previous year,” the central bank said.

The central bank in early 2013 slashed the SDA interest rates by a total of 150 basis points and even ordered the removal of all singular investment management accounts from the facility by November last year.

The BSP wanted to encourage funds to be channeled to activities that will benefit the economy instead of being parked in the SDA facility.

However, the central bank raised SDA rates last year to bring down excessive liquidity growth. Key policy rates were also raised in the third quarter to anchor inflation expectations.

Savings deposits climbed 3.7 percent in the fourth quarter from the previous three months, the BSP said, adding they still accounted for almost half of the banks’ funding base.

Demand deposits rose 3.8 percent, while time deposits climed 8.6 percent during the same period.

Foreign currency deposits owned by residents expanded 3.3 percent to P1.3 trillion in the fourth quarter.

The local banking system grew its resources by 12 percent to P11.52 trillion in end-2014 from P10.31 trillion the previous year, driven by the growth in loans, financial assets, and equity investments.

Universal and commercial banks held 90 percent of the resources at P10.4 trillion, while thrift banks had P916.2 billion. Rural banks, meanwhile, accounted for P209 billion.

Latest central bank data showed the banking system slightly reduced their resources to P11.13 trillion in January this year from the end-2014 level. This was due to a decrease in universal and commercial banks’ holdings to P10.04 trillion.