WITH DUE respect, we are sad that then Bangko Sentral (BSP) governor Nestor A. Espenilla Jr. passed away on Feb. 23, 2019, after battling tongue cancer for more than a year. He held only one year and seven months of his six-year term in the BSP and the Monetary Board (MB).
Budget secretary Benjamin Diokno was named on March 5, 2019, to lead the BSP as Governor and MB Chairman for the remainder of the term by Malacañang. Described as a respected economist, academic and civil servant, local bankers have welcomed his appointment.
We have written two consecutive weekly articles in July 2018, commenting on certain issues that came up during the term of the late Governor Espenilla, which our new BSP Governor might find worth looking into because we believe that our monetary authorities have failed to address them up to the present.
It has been our observation that there is not much banking expansion in the country, with banks concentrated only in urban centers up to now. Bangko Sentral itself, in an article headlined on the business page of a national daily on July 12, 2018, said that “Majority of Filipinos still have no bank accounts.”
In his speech as principal guest in the anniversary celebration of a major banking group on Nov. 25, 2017, Finance secretary Carlos G. Dominguez III likewise pointed out that over 86 percent of Filipinos remain unbanked. “That is an intolerable ratio of the population excluded from the financial mainstream and we aim to reduce the number dramatically over the next few years,” he emphasized.
With the foregoing observations by no less than Bangko Sentral and our Finance Secretary, one aspect of banking that our new BSP Governor must look into is the serious inadequacy of financial services for our people in the countryside.
Under our present banking set up, money flows more to commercial banks found in the cities and other commercial centers. The reason is that 36.4 percent or more than one-third of our municipalities still do not have banks. Indian money lenders have remained very active in their business in the barangays because they are not served by banks.
Based on data from the Philippine Deposit Insurance Corp. (PDIC), 75 percent of funds from the provinces flow to Metro Manila, largely coming from deposits in commercial banks periodically transferred to their head offices.
We wish that during his term BSP governor Benjamin Diokno will see this need to expand our banking services and bring more financing to the countryside instead of just hauling the funds to Metro Manila from the provinces under our present banking set-up.
***
GEM OF THOUGHT
“Life is like a river. Sometimes it sweeps you gently along and sometimes the rapids come out of nowhere.” – Emma Smith (For your comments or re-actions, please e-mail to jnoveracompany@yahoo.com)/PN
