MANILA, Philippines — The increase in bank deposits eased further, growing by only 5.8 percent as of end-June as depositors opted to park their excess funds in high-yielding instruments such as government securities.
Data from the state-run Philippine Deposit Insurance Corp. (PDIC) showed total bank deposits reached P12.84 trillion from January to June, P705 billion higher than the P12.13 trillion recorded in the same period last year.
“The elevated interest rates in deposit substitutes, such as government securities, among others, could have swayed some resources away from bank deposits,” PDIC said in its quarterly report on deposit trends.
The latest growth figure was sharply lower than the double-digit 10.3 percent increase recorded as of end-June last year.
Deposits in commercial or big banks increased by 6.2 percent to P11.68 trillion as of end-June from P11 trillion in end-June last year. Big banks cornered 91 percent of the total deposits.
On the other hand, the rise in deposits in mid-sized or thrift banks inched up by only one percent to P973.6 billion from P933.9 billion, while deposits in small or rural banks grew by 7.8 percent to P182.8 billion from P169.6 billion.
“The continuing slowdown in year-on-year growth of deposit amount largely reflects the decelerated growth in deposit levels in commercial banks and thrift banks at 6.2 percent and one percent, respectively,” PDIC said.
PDIC reported the number of deposit accounts booked a double-digit growth of 13.8 percent to 67.8 million as of end June this year from 59.6 million in end June last year.
Rural banks posted the highest annual growth in deposit accounts at 23.7 percent, followed by thrift banks at 13.8 percent and commercial banks at 12 percent.
Savings deposits and time deposits accounted for 74.8 percent of the total domestic deposit amount as of end-June 2019.
Nearly half of the domestic deposits, equivalent to P5.9 trillion were savings deposits, while time deposits cornered P3.7 trillion of the total deposits.
On the other hand, combined balances of demand deposits and NOW accounts totaled P301 trillion, while that of long-term negotiable certificates of deposits (LTNCD) reached P216.3 billion.
Individuals and private corporations made up 79.5 percent of the total domestic deposits in the Philippine banking system while 13.3 percent belonged to government.
Trust departments, banks and non-residents accounted for the balance of 7.2 percent.
The fastest growth in domestic deposit amount, however, was posted by trust departments at a rate of 16.9 percent, followed by the government with 7.8 percent, individuals with 6.1 percent, and individuals with 3.1 percent.
Peso accounts increased six percent to P10.72 trillion from P10.11 trillion, while foreign currency deposits went up by 4.7 percent to P2.12 trillion from P2.02 trillion.