Bank deposits in Western Visayas reached P533 billion as of June this year, data from the Bangko Sentral ng Pilipinas (BSP) showed.
With high savings, the loan portfolio only posted P146 billion, translating to a loan deposit ratio (LDR) of 27 percent.
BSP Visayas Regional Office Economic Affairs Staff Head Gregorio Baccay III said the LDR measures how much of the bank deposits are converted into useful investments.
“Here in Western Visayas, the loan-to-deposit ratio is less than 30 percent. What is the implication? It means that in Western Visayas, the public may be more savings-oriented than borrowing-oriented,” he said in an interview at the sidelines of the BSP media information session in Iloilo City.
Those savings, however, are termed as deposit liability because the banks will pay interest to the depositors. This means that banks have to make money from the deposits in the form of loans to interested borrowers.
Of the P533 billion deposit liabilities, universal and commercial banks have the largest portfolio amounting to P495 billion.
They also have the largest loan portfolio, amounting to P103 billion.
Baccay said policymakers and local government units may consider enhancing policies to improve their investment climate to encourage more micro, small and medium entrepreneurs and large business owners to expand by availing the loan products offered by the banking system.
“The tendency is that if the deposits are not being utilized here, it may go out of the economy of Western Visayas,” he added.Perla Lena/PNA
