BSP poll: 86% of Phlilippine households ‘unbanked’

Majority or 86 per­cent of Filipino households re­main without a bank account or what it terms as “unbanked” despite efforts of local banks to spread their branches nationwide, the Consumer Finance Survey conducted from the Bangko Sentral ng Pilipinas July 2014 to end-January 2015 showed.

The 2014 BSP survey was conducted nationwide except in Leyte, which was devastat­ed by Supertyphoon Yolanda in November 2014, and the Autonomous Region in Mus­lim Mindanao (ARMM).

In a briefing Friday, BSP Department of Economic Statistics Director Rosabel Guerrero said the major rea­son given by 92.3 percent of respondents without a bank account is that they do not have enough money for sav­ings.

Other respondents say they do not need a bank ac­count; that banks are far from their homes; that they cannot manage to have an account; high bank service charges; very high minimum balance required to maintain an ac­count and that respondents do not trust banks.

The survey also showed that those who do not have bank accounts are mostly self-employed, employed by private households and other household’s farms, and those who have informal occupa­tions.

The survey showed that only 2 percent of those who have bank accounts have credit cards.

Household-respondents from the National Capi­tal Region that have credits cards accounted for 3.9 per­cent of the total households with bank accounts, while the share of those from areas out­side of the NCR is 1.1 percent.

Among households that have a member who owns a credit card, 71.4 percent pay their monthly bills through banks, while 18.9 percent pay in payment centers, 3.9 percent through direct cash payments, and 1.9 percent through salary deductions.

The BSP said it contin­ues to implement programs to convince more Filipinos to keep a bank account.

One of these measures is the approval of operations of more micro-banking offices (MBOs) in 604 municipalities without banks, BSP data as of the end of 2013 showed.

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 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 BSP 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 the end of this year.

The BSP’s policy-making Monetary Board (MB) will also allow thrift banks to apply for license to convert into a universal or commercial bank (U/KB) by the end of this year.

By Jan. 1, 2018, all re­strictions on bank branching, which took effect in 1999, or after the 1997 Asian financial crisis, would be 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 M. 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, the BSP imple­mented a moratorium on the 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