BSP: Jan-Aug bank deposits up by 8.5% to P3.4 trillion

As many Filipinos decided to put their extra cash in banks, deposits rose by almost 10 percent from January to August this year, the Bangko Sentral ng Pilipinas (BSP) said over the weekend. The BSP reported that the total peso-denominated deposits in banks reached P3.4 trillion in January-August period, up by 8.5 percent from the same period last year. “The growth in deposits reflected sustained depositor confidence in the financial system," the central bank said in its 56-page inflation report for the third quarter of 2010. In the eight-month period, the savings deposits — which account for nearly 50 percent of the funding base — grew by 10.7 percent. On the other hand, demand or checking accounts went up by 14.1 percent, the BSP said. However, time deposits contracted by 0.01 percent from January to August this year, it added. The BSP pointed out that Filipinos managed to park their money in banks as the country’s economic growth reached 7.9 percent in the first half of this year. This surprising gross domestic product growth resulted in the expansion of the total assets of the country’s banking sector: P6.4 trillion as of end-July this year from P6 trillion in the same period a year earlier. “The increase could be traced to the growth in currency and deposits, [which is] indicative of the public’s continued trust in the banking sector," the BSP said. “Our banking system is resilient, sound, and stable. The key challenge for our banks is to preserve this growth momentum," BSP Gov. Amando Tetangco Jr. earlier said. BSP data showed that bank lending in August (12.5 percent) accelerated to its fastest since June last year (14.3 percent) as individual and corporate clients coped with the stronger-than-expected economic growth in the first half of 2010. — JE/VVP, GMANews.TV