ON JULY 10, 2018 Bangko Sentral was the subject of our column titled “BSP simply reacts; who not set policies in advance?” which discussed, among others, the need for the banking sector to reach out to more Filipinos, etc.
What a coincidence for us to read two days later of a headline in the business page of a national daily that “Majority of Filipinos still have no bank accounts, says Bangko Sentral.”
According to the results of the latest Financial Inclusion Survey by BSP, only about 15.8 million of Filipino adults had funds deposited in banks and other financial institutions as of the end of 2017. This represents 22.6 percent of our country’s total population and a slight improvement over the 22 percent who had bank accounts during the survey’s first edition in 2015.
In his speech as guest in the anniversary celebration of a major banking group on Nov. 25, 2017,Finance secretary Carlos G. Dominguez III pointed out that over 86 percent of Filipinos remain unbanked. “That is an intolerable ratio of the population excluded from the financial mainstream,” he emphasized, “and we aim to reduce this number dramatically over the next few years.”
With 36.4 percent of municipalities in the Philippines without banks, we are glad that Finance secretary Dominguez has seen the serious inadequacy of banking service in our country today.
Under present economic conditions, money flows more to commercial banks found in the cities and other urban centers after hundreds of rural banks were shuttered by the previous BSP administration.
The role of banks in the economic growth of the community is very important. The bank is being compared to a dam. The water from the waterfalls, rivers or creeks that flows downstream can be stopped by a dam at the lower level and accumulated in a reservoir. Then the water may be distributed through the canals and pipes for the various uses of the community such as for irrigation, drinking water and household use, or running a mill by generator as in the case of hydroelectric power plants, etc.
Like the case of water, money is accumulated by the banks from various deposit sources and later distributed for the financing needs of the community. The problem is that in our country today money flows more to commercial banks found in cities and urban centers and a very minimal portion reaches the countryside where 80 percent of our people live because of the absence of banking institutions in many rural communities.
From Philippine Deposit Insurance Corporation (PDIC) figures, 75 percent of funds from the provinces flow to Metro Manila, largely coming from deposits accumulated by commercial banks and transferred to their head offices. We wish that Finance secretary Dominguez will implement soon his plan to spread out the service of banks to the community, especially in the rural areas where many are poor or just struggling to survive.
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Historical Quote of the Week
“The first Doctor of Laws from Oxford University – Melquiades Gamboa of Jaro, Iloilo City.”(For comment or re-actions, please e-mail to jnoveracompany@yahoo.com)/PN
