April 19, 2017

Data from the Philippine Deposit Insurance Corporation (PDIC) showed that total deposits in the Philippine banking system grew by 14% to PHP10.5 trillion as of December 31, 2016 from PHP9.2 trillion in the previous year. Total number of deposit accounts also increased by 6% to 54 million accounts from 51 million accounts as of end-2015.

In terms of deposit size, accounts with balances of over PHP100,000 grew faster at 8.7% year-on-year compared with accounts with deposits of PHP100,000 and below which grew by 5.6%. However, in terms of share to total number of deposits, accounts with balances of up to PHP100,000 comprise 89.3% as of end-2016.

“The robust and sustained growth of deposits both in amount and number of accounts reflects heightened depositor confidence in the stability of the banking system,” PDIC President Roberto B. Tan said. “The increase in the number of deposit accounts shows how depositors continue their trust in banks to safeguard their hard-earned savings. This growth augurs well to the depositing public’s awareness of the importance of saving and overall, speaks well of more funds being made available to the system for investments and production,” he added.

Out of total deposit accounts in the banking system, a total of 52 million or 96.4% of deposit accounts as of end-2016 were fully covered by deposit insurance. This translated to total estimated insured deposits of PHP2.3 trillion or 21.5% of total deposits as of end-2016. PDIC provides deposit insurance up to maximum coverage of PHP500,000 per depositor per bank.

The growth in deposits could also be explained by the expansion of branch network in all regions nationwide from 10,574 in end-2015 to 10,952 in December 2016. Philippine banking also opened to new players in light of the law passed in 2014 allowing full entry of foreign banks in the country.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that a total of 582 cities and municipalities remained unbanked as of end-2016, a slight improvement from the 596 recorded as of March 2016. Of these data, there are 168 unbanked cities and municipalities in Luzon, 170 in Visayas, and 244 in Mindanao. As of end 2016, the Autonomous Region for Muslim Mindanao (ARMM), Eastern Visayas (Region 8), and the Cordillera Administrative Region (CAR) remained the top regions with the most unbanked cities and municipalities at 108, 99 and 50 cities and municipalities, respectively, representing 44% of all unbanked areas in the Philippines. The number of unbanked areas was partly contributed by the closure of 22 banks in 2016 where three were located in CAR, Region 4-A and Region 6.

“The continuing growth of the banking system poses both challenges and opportunities for financial inclusion,” Tan said. “The presence of unbanked municipalities underscores the importance of continuous efforts to promote financial inclusion to ensure that rural and far-flung communities have access to much-needed formal financial services,” he added. The PDIC, as part of the National Strategy for Financial Inclusion, strongly supports the government’s financial inclusion thrust. To this end, PDIC regularly conducts lectures on financial literacy and the importance of responsible banking to empower depositors and the general public with information that will help them make informed financial decisions.

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The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.