MORE TOWNS in the Philippines had bank offices in 2018, with the central bank seeing further room to widen financial access through basic deposit accounts.
Around 66.3% of towns and cities in the country have banking presence as of end-2018, higher than the 65.1% ratio in 2017, according to the latest financial inclusion initiatives report of the Bangko Sentral ng Pilipinas (BSP).
Of these municipalities, 93.2% already have at least one access point for financial services. This rose from 90.1% tallied in 2017, data showed.
“These figures have been steadily growing as banks set up more low-cost access points,” the central bank said.
Despite improving numbers, the number of Filipinos using formal financial channels remained low. Barely half of adults had savings, but 71.3% of them still kept their money through informal means rather than with the banks.
Roughly 15.8 million adults had formal accounts, or just 22.6% of the total.
The Philippines ranked fourth among 55 nations in terms of financial inclusion and the best in Asia alongside India, according to the 2018 Global Microscope of the Economist Intelligence Unit.
The central bank is counting on several reform measures to broaden financial access, starting with basic deposit accounts which were formally introduced in February last year. This allows financial firms to offer low-cost bank accounts to customers by simpler opening requirements and few documents, no minimum maintaining balance, and no dormancy charges.
Some banks have started to offer this new product, which the BSP counts as a tool to get more Filipinos aboard the financial system. It is eyed to be used by Filipinos making remittances and payments.
The recent passage of the Philippine Identification System, which will create a national ID for all Filipinos and resident aliens, should also boost inclusion, the BSP noted in the report.
The BSP targets to raise the share of digital payments to 20% of total transactions by 2020 from a measly 1% recorded in 2013 through its National Retail Payment System project.
Studies showed that gross domestic product could increase by more than 14% if the financial inclusion gap was closed in the Philippines.
The World Bank said authorities should prod Filipinos to use their account beyond storing funds, and instead pay for utility bills, domestic remittances and retail transactions. — Melissa Luz T. Lopez