Bank deposits in tandem with GDP grow 6.25%

As the country continues to recover from the brunt of the global financial crisis, more Filipinos were able to save money in banks that deposits grew by 6.25 percent in the first half of 2010, the Bangko Sentral ng Pilipinas (BSP) said this weekend. Bank deposits as of end-June this year totaled P3.4 trillion, up from P3.2 trillion in the same period last year, the BSP said. Filipinos opted to place their extra cash in banks after the economy measured by gross domestic product grew by 7.9 percent in the first half of the year, the central bank said. “The growth in deposits was indicative of sustained depositor confidence in the banking system," the BSP said in its Report on Economic and Financial Development for the second quarter of 2010. Savings and demand deposits grew by double-digit levels and remained the main sources of funds for universal and commercial banks, the BSP said. For the six-month period, savings deposits went up by 13.1 percent while demand deposits or checking accounts increased by 17.1 percent, the BSP noted. However, time deposits declined by 1.9 percent as of end-June this year. The BSP said the growth in savings and demand deposits reflected the robust expansion of total assets of the country’s banking sector to P6.6 trillion in June from P6.1 trillion in a year earlier. Universal and commercial banks accounted for almost 90 percent of total assets of the banking system, the Bangko Sentral said. “The increase was led by the growth in currency and deposits, an indication of the public’s continued confidence in the banking sector," the BSP pointed out. BSP Gov. Amando Tetangco Jr. said, “Our banking system is resilient, sound, and stable. The key challenge for our banks is to preserve this growth momentum. In this, there should be no room for complacency." Banking sector capitalization Tetangco cited the capitalization or capital adequacy ratio (CAR) of the Philippine banks that reached 14.8 percent on solo basis and 15.8 percent in consolidated terms as of end-December 2009. The BSP said the industry’s CAR continued to “exceed both the statutory level set by the BSP at 10 percent and the international standard of 8 percent." According to central bank, the CAR of the banking sector was higher than Thailand’s 15.7 percent, Malaysia’s 15 percent, and Korea’s 14.6 percent. Indonesia had the highest CAR in the region at 19.2 percent, the BSP added. BSP data showed that the number of banks in the country declined to 773 in the first half of the year from 804 a year earlier, indicating continued consolidation of banks as well as the exit of weaker players. — With Jesse Edep/VS GMANews.TV