RURAL UPDATE

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BY JOHNNY NOVERA
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Where the banks are, there is progress

FIGURES cited in our column last week based on a survey of Bangko Sentral ng Pilipinas (BSP) showed that 68.3 percent of our people prefer to keep their money at home rather than deposit it in banks.

And for people who borrow money, 72 percent of them get their loans from private sources like relatives and friends rather than from banks.

We are glad that new BSP Gov. Nestor A. Espenilla Jr. has announced a strategic move to adopt action plans that would strengthen BSP’s function towards financial inclusion and make available banking products and services that will be more accessible to the general public, especially to the marginalized sector.

The present BSP believes that with better access to financial products and services, as well as with their effort to improve financial literacy among Filipinos, poverty reduction could be achieved through the service of banks.

It will help to further expand the services of banks to areas of the country that are still unbanked, with BSP asking the bigger banks to set up branches in outlying municipalities that are unserved. We would even recommend to extend tax incentives for banks that will respond to the call and it will be good if strictly no more applications will be entertained for overbanked areas.

Along the idea of inviting more people to deposit their money in banks, we wish that Bangko Sentral look into the rationale of service charges imposed by banks on deposits. Aside from maintaining balance required, the depositor is asked to pay penalty charges monthly if the minimum balance is not kept.

Bangko Sentral’s survey says that only two out of three people deposit money in banks. We strongly recommend a regime of no service charges for depositors in the new areas to attract them to the banks.

Banks have the function of mobilizing savings in the area where they operate and then channel the funds to productive enterprises that will contribute to growth and progress of the community.

While working with a commercial bank earlier in our career, we were witness as to how a community can grow and develop because of the presence of banks.

In the early 1960s, we were assigned in Naga City to join the branch of Bank of P.I. in the Bicol region. It was a city whose chief means of transportation at that time is the horse-drawn karetela. We counted only two private cars at that time — one owned by the city mayor and another by the city judge. The third one was ours in the bank when our head office provided us with a midget model, the Vauxhall, where we first learned to drive and proud of it because it was brand new.

There was only one other bank in Naga at that time, the government-owned Philippine National Bank, because the other one, Republic Savings Bank, closed due to a bank run because funds were allegedly being “borrowed” by the owners.
When we take coffee at break time at the nearby Magnolia Kiosk across the plaza, it is a good day if you can find one other table with customer.

Six years later when we left to transfer the Roxas City branch of our bank in Capiz province, there were already five other commercial banks operating in Naga City, and one rural bank with office next door to the Magnolia Kiosk where we used to take coffee.

The obvious change was that we could now hardly find a vacant table at the coffee shop where we used to take coffee, nor it will be easy to cross the street in front of the plaza because of increased traffic from many cars and jeepneys on the main streets. The karetelas were relegated just to use the side streets. There is now a 7-storey hotel building, and several others of 4-storeys including the city’s public market.

Progress and growth can come to the towns faster when the banks are there. (For comments or re-actions, please e-mail to jnoveracompany@yahoo.com)/PN
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