The Manila Times

PH banking system resources climb to P19T

BY MAYVELIN U. CARABALLO

THE total resources of the Philippine banking system have expanded to P19.44 trillion as of last year. Sourced from deposits, bond issuances and capital infusion, the banking system’s total resources accelerated year-on-year by 6.1 percent, the Bangko Sentral ng Pilipinas (BSP) said in a report released over the weekend.

It also reported that the banking system’s total assets represented 80.7 percent of the country’s nominal gross domestic product (GDP) as end-December 2020.

Deposits, which ballooned by 8.9 percent year-on-year to P14.88 trillion, “is consistent with the global trend towards precautionary savings, decrease in consumption in view of a highly uncertain economic environment due to the [coronavirus disease 2019 or Covid-19] pandemic, and the observable increased usage of digital platforms by the BSP supervised financial institutions in onboarding depositors and investors.”

“The growth of bank deposits specifically remained firm as consumers shifted to digital payments while funding cost and quoted bank lending rates based on the BSP survey declined following the decisive reduction in reserve requirements that started in November 2019,” the central bank added.

By deposit type, savings deposits had the biggest share of total deposits at 48.3 percent, followed by demand deposits and negotiable order of withdrawal accounts, with a 27.4-percent share and time certificates of deposit with a 22.9-percent share. Long-term negotiable certificates of deposit had a minimal share at 1.4 percent.

As to counterparty, the Bangko Sentral said deposits were mostly sourced from resident individuals and private corporations, with 46.9 percent and 33.3 percent shares, respectively. Deposits from resident private corporations grew by 10.4 percent year-on-year, while those from individuals had a lower annual growth rate of 7.3 percent.

In turn, deposits relative to nominal GDP inched up to 82.8 percent in end-2020.

Bonds payable, meanwhile, increased by 26.5 percent year-onyear to P723.6 billion.

On the other hand, the banks’ fresh capital infusion of P8.3 billion as of last year raised the capital stock to P1 trillion.

“Other capital components consisting of deposits for stock subscription, other equity instruments, assigned capital of foreign banks and accumulated earnings also posted growth which all contributed to higher capital of banks during the period,” the bank said.

Moreover, the BSP said the report also assessed the relative strength and sources of vulnerabilities of the Philippine banking system based on a set of Financial Soundness Indicators (FSI) used to determine the current financial health and soundness of financial institutions in a country including their corporate and household counterparts.

“The analysis of the FSIs suggest that the Philippine banking system is stable and resilient despite global uncertainties related to the extent and path of Covid-19 menace.”

Lastly, the Bangko Sentral said the assessment also implies that consequential risks from lending should be monitored, including emerging risks from inflation expectations and potential secondround effects from higher prices and increase of non-performing accounts that could exert more pressure on the banking system. central

Business Times

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2021-05-09T07:00:00.0000000Z

2021-05-09T07:00:00.0000000Z

https://manilatimes.pressreader.com/article/281827171640863

The Manila Times