The six digital banks in the Philippines combined has accumulated 5,853,642 depositors as of end-December 2023, up 27 percent from end-September’s 4,608,316, based on data from the Bangko Sentral ng Pilipinas (BSP).
In peso terms, the number of depositor’s accounts in digital banks is worth P69 billion as of end-2023.
Compared to same period in end-December 2022, the digital banks have no depositor accounts’ data from the BSP since these banks were just established in 2021 and started initial operations in different periods in 2022. They went live and became fully-operational in 2023.
In a statement Friday, April 5, the newly-formed Digital Bank Association of the Philippines (DiBA PH) said the sector’s deposit base is growing faster compared to the total banking industry which only grew its deposit accounts by 3.6 percent quarter-on-quarter.
As of end-December 2023, the number of depositors for the whole Philippine banking sector totaled 112,273,493 versus 108,340,581 percent end-September, or an increase of 3.6 percent.
On a year-on-year basis, the overall banking system’s depositor base grew higher by 9.8 percent from 102,225,080 in end-December 2022. In peso terms, the whole banking system recorded P19.032 trillion of total deposits last year.
According to DiBA PH, the country’s six digital banks “have reported impressive growth, outperforming traditional banking institutions in expanding access to financial services.”
The six BSP-licensed digital banks are: GoTyme Bank, Maya Bank, Overseas Filipino Bank, Tonik Bank, UnionDigital Bank, and UNO Digital Bank.
“Digital banks are changing the game for financial inclusion in the country beyond access. This kind of growth in such a short amount of time is unprecedented in terms of onboarding the unbanked and underserved,” said Angelo Madrid, the group’s president. He is also the president of Maya Bank.
Last year, the six digital banks reported gross total loan portfolio of P24.706 billion despite “considerable infrastructural challenges, including the rollout of the national ID system and limited coverage by the national credit bureau,” said DiBA PH.
But the group said that they have “transcended infrastructural limitations to significantly boost financial inclusion, offering deposit accounts and credit to populations that traditional banks have typically overlooked.”
“This democratization of financial services is a testament to the potential of technology-driven banking solutions to foster economic empowerment and inclusivity,” said Manish Bhai, DiBA Trustee and Founder-CEO at UNO Digital Bank.
Meanwhile, Long Pineda, the group Vice President and Chairperson of Tonik Digital Bank Inc. said, “the next three years are pivotal for reinforcing the digital banking sector's foundations, scaling lending operations, and solidifying confidence among investors and customers alike.”
BSP Governor Eli M. Remolona Jr. has said previously that while digital banks have no problem attracting new deposits, the challenge is in providing loans to unsecured borrowers and collection.
As of end-December 2023, digital banks’ gross non-performing loan ratio stood at 14.49 percent compared to 3.23 percent industry gross NPL. The peak was even 20.25 percent recorded in November 2023.
The total NPLs which are unpaid loans for more than 30 days after due date, reached P3.599 billion in December from P4.088 billion in November 2023.
Past due ratio or the rate of delinquency was also high at 21.61 percent in December 2023 but the November ratio was even higher at 30.64 percent. Comparably, industry past due ratio was 3.95 percent.
The BSP has closed the window for digital bank applications for three years, or from September 2021 until the end of 2024.