Ideally, the best banking systems source their financial prowess from the debt or equity markets. But in the Philippines, the banking system relies heavily on savings and time deposits as sources of funds, based on latest data from the Bangko Sentral ng Pilipinas (BSP).
In latest reports, the BSP said the banks’ total deposits at end-November 2015 swelled to P7 trillion.
This was 8.5 percent, or P500 billion, higher compared to the same month a year earlier. The growth in deposits recorded in November last year was faster than the 8.3-percent growth reported the previous month.
In terms of components, savings deposits expanded by 10.4 percent during the month, while demand deposits expanded by 15 percent.
Time deposits declined by 1 percent, or by P17 billion, during the review period. The decline in time deposits was considered “marginal” by the BSP, however.
“Savings and time deposits remained the primary sources of funds for the banking system,” the central bank said.
Meanwhile, foreign-currency deposits owned by residents and other deposits in foreign currency grew by 12.7 percent year on year to P1.5 trillion during the period.
In an earlier speaking engagement, BSP Governor Amando M. Tetangco Jr. said the banking system continued to be “stable and liquid” in 2015 and helped provide support for the economy.
The BSP chief also said the banks need to diversify their product offerings and align themselves with global best practices to compete more effectively with regional banks set to enter the country under a more integrated Asean.
“We will also align our supervisory policies with international standards, to provide a more level playing field for our local banks. This is crucial as we prepare for the entry of more regional and international banks under the Asean economic- and financial-integration program,” Tetangco said.