Bank deposits up by 9% to P14.9 trillion in 2020

CEBU, Philippines — Filipinos have increased their savings during the pandemic, as indicated in the nine percent growth of deposits in the Philippine banking system as of end-December 2020.

Latest data released by the Philippine Deposit Insurance Company (PDIC) revealed that deposits in the Philippine banking system grew by nine percent or P1.2 trillion, reaching P14.9 trillion as of end-December 2020 despite the pandemic.

According to PDIC, this revealed the propensity of Filipinos to save and to be financially prepared during difficult times.

The sustained growth in deposits also indicates that more savers are benefitting from the protection provided by PDIC up to the maximum deposit insurance coverage (MDIC) of P500,000 per depositor per bank.

PDIC data showed that total deposits grew by 9.0 percent to P14.9 trillion as of end-December 2020 from P13.6 trillion as of end- December 2019. The number of deposit accounts likewise increased by 8.7 percent to 80.1 million from 73.7 million deposit accounts in the same period last year.

The boost in deposits also mirrored the expansion of fully insured deposit accounts by 8.8 percent to 77.4 million from 71.2 million year-on-year. This represents 96.7 percent of the total fully insured deposit accounts.

In terms of amount, P1.7 trillion total deposits is fully covered by deposit insurance, an expansion of 8.6 percent from the P1.6 trillion level posted in the same period in 2019.

Further, data as of December 2020 showed that deposits with balances above PhP500,000 grew by 9.0 percent to P13.1 trillion from P12.0 trillion in December 2019. Total number of accounts reached 2.7 million by year-end 2020 vis-à-vis 2.5 million at the close of 2019.

In spite of the pandemic, most deposit types registered increases both in terms of accounts and amount.

Savings deposits and demand/NOW deposits increased by 16.2 percent and 20.8 percent, respectively, or to P7.2 trillion and P4.1 trillion. Savings deposits and demand/NOW deposits jointly accounted for the bulk of total domestic deposits at 75.9 percent.

Depositors’ preference for liquidity in these uncertain times, through accounts that will allow them to withdraw cash immediately, is clearly manifested in the negative growth of 11.8 percent in time deposits and Long-Term Negotiable Certificates of Deposit (LTNCDs) to PhP3.6 trillion in end-December 2020 from the previously recorded PhP4.1 trillion in end-December 2019. Combined, time deposits and LTNCDs summed to PhP3.6 trillion and accounted for 24.1 percent of total deposits.

“The pandemic underscored the important role banks play in enabling access to essential financial services. The deposit growth is also an indication of improved depositor confidence in the banking system,” PDIC President and CEO Roberto B. Tan said.

The PDIC is an active member of the Financial Sector Forum composed of Philippine financial regulators and staunchly encourages saving in banks. It strongly advocates financial literacy and financial inclusion as its corporate social responsibility programs consistent with its mandate to protect depositors and promote financial stability.