Philippines digital banks have seen remarkable growth, collectively amassing over PHP 80 billion in deposits by June, according to a report by the INQUIRER.net.
This increase, nearly tripling their depositor base compared to the previous year, highlights the rising popularity of digital banking services in the country.
Since the introduction of the Digital Banking Framework in December 2020, six digital banks have been established in the country.
Among them are Tonik, Maya Bank, Overseas Filipino Bank (OFBank), UNObank, UnionDigital Bank, and GoTyme Bank.
Recent figures from the Bangko Sentral ng Pilipinas (BSP) indicate that these six digital banks have expanded their depositor base to 8.7 million, up from 3.6 million in the same period last year.
This expansion has driven the total deposits within the digital banking sector to PHP 82 billion, with a striking annual growth rate of 32.26 percent.
In comparison, the entire Philippine banking system recorded a 13.84 percent increase in depositor accounts, reaching 119 million, and a 9.5 percent rise in total deposits to PHP 19.5 trillion.
The growth of digital banks is particularly notable among underserved markets, in contrast to traditional banks that largely focus on established borrowers with proven credit histories.
As the BSP had recently announced its decision to welcome four more digital banks in 2025, the competitive landscape is expected to become more intense.
However, these new entrants will likely face challenges in building profitable loan portfolios, similar to those encountered by existing digital banks that primarily cater to first-time customers.
To address these challenges, the BSP said that only applicants demonstrating a unique value proposition or innovative business models not currently available will be considered for the new licenses.
GCash, which has already disbursed PHP 155 billion in loans could potentially be a strong contender for one of the new licenses.
The e-wallet currently has 5.4 million borrowers, with this number increasing by more than 70% year-on-year.
Featured image credit: Edited from Freepik
