Filipinos continued to save money amid the pandemic, as total deposits in the banking system grew 9 percent in 2021 to a record P16.2 trillion from P14.9 trillion in 2020, as the economy started to recover from the impact of the pandemic, state-run Philippine Deposit Insurance Corp. said Tuesday.
PDIC president Roberto Tan said in a statement that while the pandemic might have been an unpleasant wake-up call for many Filipinos, it highlighted the importance of saving for the future and emergencies.
“With more banks offering basic deposit accounts, saving money in banks becomes much easier and practical,” Tan said.
The expansion was driven by deposits with balances of above P5 million in terms of size of account and non-term deposits in terms of type of deposits.
Meanwhile, the number of domestic deposit accounts increased 8.8 percent to 87.1 million in 2021 from 80.1 million accounts in 2020. Deposits with balances of P5,000 and below and savings deposits mostly accounted for the increase in the number of domestic deposit accounts.
Deposits with balances of above P5.0 million contributed 85.2 percent or P1.1 trillion to the annual expansion of domestic deposits. By type of deposits, demand and savings posted annual increases at 17.6 percent and 9.5 percent, respectively. These two deposit types accounted for the entire growth in domestic deposits, data from the PDIC showed.
Long-term negotiable certificates of deposit and time deposits, however, contracted by 5.9 percent and 1.4 percent, respectively, exerting downward pressure on the overall domestic deposit growth.
PDIC said that given the growth in domestic deposits, insurance up to the maximum deposit insurance coverage of P500,000 per depositor per bank expanded by 3 percent in 2021 to P3.2 trillion, representing 19.5 percent of the total domestic deposits.
The deposit insurance system fully covered 96.8 percent or 84.3 million of domestic deposit accounts, higher by 8.9 percent than the 77.4 million fully-covered domestic deposits accounts in 2020.
The PDIC said that as of Dec. 31, 2021, the Philippine banking system had 506 banks, comprising 413 rural banks, 47 thrift banks and 46 commercial banks, including 24 branches of foreign banks.
Banks licensed to operate in the Philippines by the Bangko Sentral ng Pilipinas are members of the PDIC which insures bank deposits.
Most universal and commercial banks reported strong growth in 2021 on the back of steady increase in deposits and loans despite the record low interest-rate environment.