ILOILO City – Western Visayas has more deposits than loans, a trend reflecting a savings-oriented culture but also revealing untapped potential for investments, according to the Bangko Sentral ng Pilipinas (BSP) Visayas Regional Office.
As of June 2024, the region’s loans-to-deposit ratio stood at 27%, significantly below the BSP’s target threshold of 60% to 70%.
The ratio measures the extent of banks’ lending activity relative to the deposits generated in the region.
With total deposits reaching P533 billion and loans amounting to only P146 billion, Western Visayas’ financial resources remain largely underutilized.
Dr. Gregorio E. Baccay III, Bank Officer V of the BSP’s Visayas Regional Economic Affairs Staff, highlighted the disparity during a Media Information Session in Iloilo City.
This indicates that the people of Western Visayas are more inclined to save than invest, Baccay explained.
To address the imbalance, the BSP recommended that the Regional Development Council (RDC) and local government units (LGUs) work to enhance the region’s investment climate to attract more businesses. “There’s money in Western Visayas, but the question is, how do we convert it into useful investments? This requires a whole-of-government approach, with LGUs taking the lead in creating policies that promote business expansion,” Baccay said.
The BSP emphasized the need for investment promotion initiatives targeting micro, small, and medium enterprises (MSMEs).
By encouraging businesses to expand, the region can stimulate greater demand for capital, which in turn would drive bank lending, explained Baccay.
“There are 811 banks and 1,191 automated teller machines in the region, but the challenge lies in creating an environment where financial resources are actively used for growth,” Baccay sad.
Iloilo leads with 327 banks and 428 ATMs, followed by Negros Occidental with 253 banks and 443 ATMs, based on June 2024 data.
Despite the low loan-to-deposit ratio, Baccay noted a positive takeaway: the region’s excess financial resources suggest economic stability among its residents.
“It’s a good indicator that Ilonggos have the capacity to save. Savings reflect financial strength and stability,” he said.
The BSP continues to urge LGUs to implement investment-friendly policies, citing the importance of converting the region’s abundant deposits into drivers of economic growth./PN
