DOMESTIC banks remained sound and resilient in 2015, with savings and time deposits as the primary sources of funds for the banking system, Bangko Sentral ng Pilipinas said in a report.
The Report on Economic and Financial Developments for the fourth quarter showed that banks’ total deposits as of end-December amounted to P7.3 trillion, a year-on-year growth of 8.9 percent or P0.6 trillion, outpacing slightly the 7.5 percent increase posted in the previous quarter.
“Savings and demand deposits expanded by 12.4 percent and 17.1 percent from the year- and quarter-ago rates, respectively. Meanwhile, time deposits declined by 3.9 percent during the review period which is equivalent to P72.9 billion. On the other hand, foreign currency deposits owned by residents grew by 8.3 percent, y-o-y, to P1.5 trillion,” the report said.
Outstanding loans of commercial banks as of end-December 2015, net of banks’ RRP placements with Bangko Sentral, rose 13.6 percent on year, higher than the 12.6 percent posted a quarter ago.
Bank lending, inclusive of RRPs, increased also 12.7 percent relative to the level posted in end-2014.
“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 fourth quarter 2015,” Bangko Sentral said.
Loans for production activities, which comprised more than 80 percent of banks’ aggregate loan portfolio, expanded 13.7 percent in December on year. The growth in production loans was driven primarily by increased lending to real estate activities, 19.5 percent; electricity, gas, steam and air-conditioning supply, 27.5 percent; wholesale and retail trade, and repair of motor vehicles and motorcycles, 12.6 percent; financial and insurance activities, 12.3 percent; and information and communication, 27 percent.
Bank lending to other sectors expanded during the month, except for administrative and support services activities, and other community, social and personal activities, which declined 5.2 percent and 1.8 percent, respectively.
Loans for household consumption grew 15.1 percent in December due to sustained growth in credit card loans, motor vehicle loans, salary-based general purpose loans, and other types of loans
The resources of the banking system rose 7.9 percent to P12.4 trillion as of end-December 2015 from the year-ago level of P11.5 trillion. Total resources stood at 93.7 percent as a percent of GDP.
Universal and commercial banks continued to account for 90 percent of the total resources of the banking system.
The Philippine banking system’s gross non-performing loan ratio stood at 2.1 percent as of end-December 2015, an improvement relative to the 2.3 percent posted a year- and quarter- ago.