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MANILA - Bangko Sentral ng Pilipinas Gov. Benjamin Diokno said Monday, the "uncertainty" caused by the pandemic is pushing Filipinos to save more as most of them stay holed up in their homes.

Total deposits increased by 3 percent, bringing the total by end of July to P14.3 trillion, Diokno told ANC. However, Diokno said the savings surge was unlikely to become "sustainable."

"People are saving because they’re not spending, they’re holed up in their homes and maybe because they are uncertain of the future and they tend to save more during uncertain times," Diokno said.

"I don’t think this is sustainable, as you know a big part of our gross domestic product is consumption so when things normalize, I think spending would pickup," he added.

One of the world's longest lockdowns was imposed in the Philippines in mid-March, forcing businesses, offices and schools to shut. The restrictions have been gradually eased to jumpstart economic recovery.

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Lending, meanwhile is likely to "normalize" starting this quarter moving forward as the economy gradually and continuously reopens, Diokno said.

The BSP earlier encouraged consumers to spend in order to stir economic activity and to take advantage of record-low interest rates.

The benchmark interest rate was kept unchanged at 2.25 percent during last Thursday's monetary board meeting since the prevailing policy remains "appropriate" Diokno earlier said.

The 4th quarter gross domestic product (GDP) growth is seen to be "much, much" better due to normalizing conditions, he said.

The Philippines fell into recession after the second quarter GDP dropped 16.5 percent due to the impact of the COVID-19 pandemic and resulting lockdowns.

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This year, the economy is seen to contract by 5.5 percent, according to government estimates.