State-run Philippine Deposit Insurance Corp. (PDIC) said that the post-pandemic data on the growth in deposits in the rural banking sector point to strong depositor confidence in small banks amid great uncertainty.
PDIC president and CEO Roberto Tan highlighted the important role rural banks play as pillars of economic resilience in the countryside during the 69th Annual National Convention and General Membership Meeting of the Rural
Bankers Association of the Philippines (RBAP) held in Dapitan City, Zamboanga del Norte.
Even amid the COVID-19 pandemic, the depositing public continued entrusting their money to rural banks.
Data showed the average quarterly growth rate of rural banks’ insured deposits doubled to 1.9 percent in the first seven quarters of the pandemic from the second quarter of 2020 up to the fourth quarter of 2021 from only 0.8 percent for the previous seven quarters from the third quarter of 2018 to the first quarter of 2020.
This is consistent with the observation of the International Association of Deposit Insurers (IADI) in terms of global banking industry trends particularly, the growth of insured deposits during the early quarters of the pandemic.
Tan pointed out that these figures point to strong depositor confidence in rural
banks even during times of great uncertainty.
While the total deposits of the Philippine banking sector grew by 2.2 percent since the onset of the pandemic from the second quarter of 2020 to the fourth quarter of 2021, the deposit base of rural banks increased at a faster rate of 3.2 percent.
As the country starts to recover from the serious impact of COVID-19, depositor
confidence in rural banks is expected to remain strong.
The depositing public can also be assured that with deposit insurance the PDIC provides and the collaboration it forges with the rural banking sector in terms of governance and record-keeping, their hard-earned deposits in these important pillars of economic resilience are more than adequately protected with deposit insurance.
PDIC was established in1963 via Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing deposit insurance. Since June 2009, the maximum deposit insurance coverage is P500,000 per depositor.