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BY HERBERT VEGO
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Bank depositors on losing end
THE latest word from the World Bank (WB) bared “dismal failure” of banks in the Philippines to attract depositors. Based on figures culled from all banks nationwide, only ten million Filipinos, or 10 percent of the Philippine population, have bank accounts.
This means that even those with unspent money prefer other alternatives of “growing” it, obviously because regular savings accounts do not earn attractive interest. On the contrary, accounts that fall below the bank’s required minimum deposit gradually “melt” because of penalty imposed.
The very low interest on savings is one reason why the savings rate in the Philippines is low. As sanctioned by the Bangko Sentral ng Pilipinas, interest on savings is at a measly 0.75 to 1 percent per annum – certainly a losing proposition that lags behind inflation rate. As if this were not bad enough, the earned interest also shrinks due to government-imposed withholding tax.
So, better to invest in buy-and-sell, in a small sari-sari store or in lending to friends and neighbors. It is not uncommon to see somebody stocking his refrigerator or freezer with soft drinks, ice or ice candy for sale.
I remember a tale shared to me a cousin, for whose daughter she opened a “kiddie savings account.” She deposited additional money into it month after month until it hit the P5,000 mark in one year. After a year, the mother had to withdraw the money due to an emergency.
Imagine her dismay at discovering that the accrued interest could not cover her taxi fare.
That confirms another BSP finding – that low-income savers are very vulnerable to risks emanating from unexpected situations that require spending.
According to BSP survey supervisor Nataliya Mylenko, among the non-depositors are those who earn P50,000 a month, which is far above the minimum wage. Does this indicate that they still could not cope with their family’s standard of living?
Probably yes for a family with more than two children, but couples who worry over a larger brood inevitably educate themselves on “financial literacy” and engage in micro and small enterprises.
They figure out that whenever they deposit cash for a song, it’s the bank that really earns by lending the same money to favored entrepreneurs and industrialists at higher interest rates!
“Unfair,” these small depositors wail. When they themselves go to the bank for loan, they are spurned due to lack of collateral.
Distrust in the banking system is probably the biggest reason why even the moneyed are cautious about keeping their eggs in one basket. It is no longer possible to count in one’s fingers the local banks that have folded up, leaving their depositors at the delayed mercy of the Philippine Deposit Insurance Corporation (PDIC), which could only refund claimants a maximum amount of P400,000. If a depositor has more than that, sorry na lang.
Everybody has heard of ATM accounts suddenly “emptied” without the card owners’ participation. Take the case of a retired government employee named Bernardita Lerio.
On Aug. 9, 2015, Lerio tried to withdraw cash at the Landbank ATM (Plaza Libertad branch, Iloilo City). Instead of dispensing cash, however, the machine “ate” her card. That day being a Sunday, there was no personnel except the security guard who asked her to come back “tomorrow na lang.”
To make the long story short, she came back and got back her card, which she promptly inserted into the ATM machine. But to her horror, her expected balance of P26,000 had diminished to only P63.73. Obviously, an unknown “magician” had withdrawn her money.
The bank manager promised to probe the heist, but to no avail. And so to this day, Lerio is still waiting for a refund of her stolen deposit./PN
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