SAVINGS and time deposits remained the main sources of funds for domestic banks in the third quarter this year, according to the latest report of Bangko Sentral ng Pilipinas covering the July-to-September period.
Banks’ total deposits as of end-September 2015 grew 7.8 percent to P6.9 trillion, or P0.5 trillion higher than a year ago.
Tthe growth in deposits in the third quarter, however, slightly weakened compared with the 8.2 percent expansion posted in the previous quarter.
“Savings and deposits expanded by 9.3 percent and 15.3 percent, respectively. Time deposits, on the other hand, declined by 1.4 percent or P24.1 billion during the review period,” Bangko Sentral said.
Foreign currency deposits owned by residents grew 13.7 percent year-on-year to P1.5 trillion.
Meanwhile, outstanding loans of commercial banks as of end-September, net of banks’ RRP placements with Bangko Sentral, rose 12.6 percent year-on-year. Bank lending, inclusive of RRPs, increased 12.4 percent relative to the level posted in the third quarter of 2014.
The increases were lower compared with the previous quarter on both net (14.5 percent) and gross (14.2 percent) of RRP placements. Commercial banks’ loans have been increasing steadily at a double-digit pace since January 2011.
“The continued broad-based growth in bank lending supported the sustained expansion of the productive sectors of the economy in the third quarter,” the bank regulator said.
Loans for production activities—which comprised more than 80 percent of banks’ aggregate loan portfolio—expanded increased 13.2 percent in September year-on-year.
The growth in production loans was driven primarily by increased lending to different sectors, such as real estate activities (20.4 percent); electricity, gas, steam and air-conditioning supply (27.5 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (14.4 percent); and financial and insurance activities (16 percent).
Bank lending to other sectors also expanded during the month, except for transportation and storage, other community, social and personal activities, and manufacturing, which declined 0.1 percent, 0.3 percent, and 2.2 percent, respectively.
Loans for household consumption grew 12.7 percent in September due to sustained growth in credit card, salary and auto loans.
Bangko Sentral Governor Amando Tetangco Jr. said earlier the Philippine banking system remained solid, with their balance sheets marked by a sustained growth in assets and deposits.
Despite the strength of domestic banks, Tetangco said banks must continue to find ways on how to further solidify their operations amid the threats posed by foreign banks taking advantage of the more open banking industry.