Stable inflation along with the increase in wages and robust flows from Filipinos overseas resulted to the continued rise of Philippines’s savings volume, which rose 13.3 percent year on year in 2013 to P2.11 trillion.
Data released by the Bangko Sentral ng Pilipinas (BSP) show that domestic savings were primarily driven by the household sector for the sixth year in a row, which registered P909.7 billion savings.
It was followed by the nonfinancial sector with P743.5 billion, fuelled by the continued profitability of the services and industry sectors.
The general government came in third with savings amounting to P332.2 billion on back of higher revenues both by the national government and the local government units (LGUs).
The financial sector had the lowest savings among the sectors with only P122 billion but it registered the biggest growth at 22.5 percent due to increased profitability of the banking system, particularly the universal and commercial banks (U/KBs).
Also, capital accumulation was similarly expanding after this went up by 6 percent year on year to P1.7 trillion at end-2013.
The largest holder of these assets was the nonfinancial sector at P647.6 billion, but such holdings grew only by 2.1 percent compared to the previous year.
The household sector also posted a slight or 1-percent increase in capital to P586.4 billion “as households continued to acquire real estate.”
It was the financial sector that posted the highest growth in capital accumulation at 70.4 percent “largely due to goodwill recorded by some major universal/commercial and thrift banks as a result of certain mergers and acquisitions.”
The general government also posted a big jump in its capital accumulation at 16.5 percent to P369.5 billion “due to the national government’s accelerated disbursement for infrastructure projects and capital outlays.”
In terms of net lending activities, the household sector posted robust growth of 44.5 percent, after savings grew faster than the sector’s placements in nonfinancial assets.
“The sector’s currency holdings and deposit placements surged as households took a cautious stance amid domestic and global uncertainties over financial stability concerns,” the BSP said.
Net lending of the nonfinancial sector went up by 115.8 percent on back of the huge jump in its savings growth while that of the financial sector dropped by 1.1 percent.
Higher savings and lower capital investments by the LGUs, in turn, allowed the general government sector to be a net borrower in 2013.
Similarly, the country’s net lending to the rest of the world significantly improved after it grew by 52.3 percent to P448.1 billion, from 2012’s P294.2 billion.
“The domestic economy’s net lending position continued to strengthen on account of the substantial surplus of $10.4 billion in the current account,” the BSP said, adding that the most preferred financial instruments in the country were currency and deposits, as well as debt securities.
PNA CTB/JS/EDS