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Sunday, January 15, 2017
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MANILA – Majority of Filipino households remained unbanked despite efforts of banks to increase the number of their branches nationwide.
The Bangko Sentral ng Pilipinas (BSP), in its Consumer Finance Survey conducted from July 2014 to end-January 2015, found that 86 percent of Filipino households remained unbanked.
The 2014 survey was conducted nationwide except in Leyte, which was devastated by super typhoon “Yolanda” in November 2014, and the Autonomous Region in Muslim Mindanao (ARMM).
In a briefing Friday, BSP Department of Economic Statistics director Rosabel B. Guerero said primary reason why households do not have bank accounts is they do not have enough money to keep an account.
Other respondents say they do not need a bank account; the banks are far from their homes; they cannot manage to have an account; banks have too high service charges; the minimum balance required to maintain an account is too high while some people do not trust banks.
Normally, household heads who have bank accounts are those who are employed either in the government and private agencies.
The survey also shows that those who do not have bank accounts are mostly self-employed individuals, employed by private households and other household’s farms, and those who have informal occupations.
Survey shows that only 2 percent of those who have bank accounts have credit cards.
Household-respondents from the National Capital Region (NCR) that have credits cards accounted for 3.9 percent of the total for the region while share of those from areas outside of the national capital is 1.1 percent.
Among the credit card holder-households, 71.4 percent pay their monthly bills through banks’ operations while 18.9 percent pay in payment centers, 3.9 percent through direct cash payments, and 1.9 percent through salary deductions.
And since the number of Filipinos who remain unbanked is still high, the BSP continues to implement programs to improve the numbers.
One of these measures is the approval of operations of more micro-banking offices (MBOs) in unbanked municipalities, which central bank data show number to about 604 as of end-2013.
BSP deputy governor Diwa Guinigundo, in the same briefing, said “bank branching must be encouraged so that their services will be felt by the majority of population.”
He explained that “banking services must be more accessible to everyone” since it is “a very important thing, for us to have a more inclusive economic growth.”
“We need to strengthen efforts toward greater financial inclusion. We have already started this and we need to sustain this,” he added.
The central bank said it adopted last February a two-tier approach in lifting restrictions on establishment of new banks, with the first phase to take-effect until end-2017.
BSP’s policy-making Monetary Board (MB) has decided to allow existing thrift banks to apply for license to convert into a universal or commercial bank effective end-2017.
By Jan. 1, 2018, all restrictions, which took effect until 1999, will be fully lifted, the BSP said.
“This initiative provides local businesses the avenue to explore opportunities in the banking sector amid the opening of the industry to foreign capital infusion,” BSP Governor Amando Tetangco Jr. said.
Tetangco explained that the two-year transition phase would give interested investors “ample time to strategically position themselves in line with evolving policy reforms and regional integration efforts.”
In 1999, BSP implemented a moratorium on establishment of new banks in eight restricted areas in Metro Manila to encourage existing players to merge and consolidate to further strengthen the industry.
The restricted areas are the cities of Makati, Mandaluyong, Manila, Paranaque, Pasay, Pasig, San Juan and Quezon.
The moratorium does not cover unbanked areas as well as thrift and rural banks that are focused on microfinance.
Along with the gradual lifting of restrictions, the BSP said it would also implement a graduated matrix of application and licensing fees.
However, the central bank said this rule exempted applications for new banks with head offices in unbanked areas as well as applications for mergers and acquisition for distressed financial institutions. (PNA)
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