MANILA, Philippines — More Filipinos continue to entrust their savings with banks as deposits recorded a double-digit increase in the first five months amid the strong economic growth.
Total bank deposits rose by a double-digit rate of 11.7 percent to P11.4 trillion from January to May, compared to the P10.17 trillion recorded in the same period last year.
Data from the Bangko Sentral ng Pilipinas (BSP) showed peso-denominated deposits grew by more than three percent to P9.5 trillion in the first five months, while foreign currency deposits owned by residents went up by 7.8 percent to P1.9 trillion.
“Savings deposits remained the primary source of funds for the banking system,” the central bank said.
The total resources of Philippine banks rose by 12 percent to a record P15.92 trillion in the first five months from a year-ago level of P114.21 trillion.
Assets of big banks or universal and commercial banks increased by nearly 13 percent to P14.44 trillion from P12.8 trillion, while that of mid-sized banks or thrift banks inched up 5.2 percent to P1.22 trillion from P1.16 trillion.
Last January, the central bank released the framework for banks to offer a basic deposit account to promote account ownership among the unbanked and provide Filipinos the tool to save and transact money in a safe, convenient and affordable manner.
The BSP said the framework could unlock access to a wider range of financial services to meet their various needs, including credit, insurance and investments.
The minimum key features of the account include: simplified know-your-customer (KYC) requirements; an opening amount of less than P100; no minimum maintaining balance; and no dormancy charges.
To prevent misuse of the basic deposit account, its maximum balance is set at P50,000. These features meet the need of the unbanked for a low-cost, no-frills deposit account clients could open even if they do not have the standard identification documents.
As an incentive for banks, the basic deposit account is granted a preferential zero reserve requirement which lowers their account maintenance cost.
The BSP clarified the regulatory incentive does not apply to regular bank accounts even if their balances fall below P50,000.
The central bank said the basic deposit account supports the implementation of the National Retail Payments System (NRPS) that aims to increase adoption of digital payments in the country.