Philippine banks' deposits to grow 13% in 2018

The deposit base is growting at a five-year CAGR of 14.3%.

Deposit growth remains substantial with 14.2% growth at end-June 2017. According to Maybank Kim Eng, the Philippine banking industry’s deposit base is expanding at a five-year CAGR of 14.3%, with low-cost funds rising faster at 15.5% vs high-cost deposits at 11.6%. This mix reversed in 2013 when the BSP disallowed some trust accounts in the Special Deposit Account (SDA) facility, resulting in a massive shift to banks’ deposits, particularly in time deposits.

"This was repeated in 2Q17 as the BSP disallowed participation of trust entities in its deposit facilities. These should normalise eventually as the drive to boost CASA deposits will continue through additional branches and new digital channels. We estimate deposits to grow 13% in 2018F," added Maybank Kim Eng.