MANILA - Total deposits accumulated by the local banking system reached P3.1 trillion for the first three months of 2009, up 14.8 percent from P2.7 trillion recorded in the same period last year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The increase in bank deposits was fueled mainly by time and demand deposits, which rose 33.6 percent and 19.8 percent, respectively. Savings deposits, meanwhile, were up 1.6 percent for the three-month period.

As savings went up, the BSP said the total resources of the banking system rose by 13.5 percent to P5.9 trillion from P5.2 trillion in the first quarter of 2008. The increase was largely driven by the rise in cash and loans accounts, with universal and commercial banks accounting for almost 90 percent of the total resources of the banking system.

At the end of the quarter, the BSP said the banking system's asset quality continued to improve as the non-performing loan (NPL) ratio eased further to 4.1 percent from 5 percent in the same period last year.

The BSP attributed the improvement to the 6.3-percent drop in the level of NPLs, which was complemented by a 14-percent expansion in the banking industry's total loan portfolio (TLP).

Compared with other countries in Southeast Asia, the BSP said the Philippine banking system's NPL ratio was lower than Indonesia's 4.5 percent. It was, however, higher than Thailand's 3.1 percent, Malaysia's 2.2 percent, and South Korea's 0.6 percent.

The lower NPL ratios in Thailand, Malaysia, and South Korea, however, resulted from the creation of publicly-owned asset management companies, which purchased a bulk of their NPLs, a practice that it not resorted to in the Philippines.