By Mikhail Franz E. Flores, Reporter

Majority of Filipino adults still unbanked

Posted on April 16, 2015

MORE than two-thirds of adults in the Philippines remain unbanked, a World Bank study showed, with the report also noting Filipinos are more likely to use remittance centers than regular banks.

According to The Global Findex Database 2014: Measuring Financial Inclusion around the World, 31% of Filipino adults have bank accounts. Among the “banked,” 38% are women, the study noted.

Only 18% of adults in the poorest 40% of households have bank accounts, the World Bank policy working paper also said.

“In Colombia and the Philippines people are most likely to use a money transfer operator. About three-quarters of adults who reported sending or receiving remittances said that they used this method,” the study said.

Financial inclusion refers to a condition where individuals have effective access to a wide range of financial services. The Bangko Sentral ng Pilipinas’ (BSP) mandate includes ensuring the availability of financial products to different market segments.

The BSP said in its 2014 annual report it plans to release this year a framework that will help measure financial inclusiveness in the country.

“This demand-side survey... will help the BSP complement the existing supply-side data. It will provide rigorous, objective and reliable data that can help the BSP to monitor progress, identify existing barriers, set targets and craft evidence-based financial inclusion policies,” read the report.

“The results of the survey will be utilized to capture a more accurate picture of financial inclusion in the Philippines,” it added.

The BSP said 36.5% of the country’s 1,634 cities and municipalities remain unbanked even as there are more than 10,000 banking offices nationwide.

Filipino adults’ access to bank accounts compare with Vietnam’s level of also 31%, which is the lowest among the ASEAN-5, the World Bank policy paper showed. Malaysia has the highest penetration rate at 81%, followed by Thailand (78%) and Indonesia (36%).

East Asia and Pacific had a 69% regional average for bank penetration rate.

In a statement, the World Bank said 700 million people became account holders between 2011 to 2014 and the number of “unbanked” individuals dropped 20% to two billion adults.

“Between 2011 and 2014, the percentage of adults with an account increased from 51% to 62%, a trend driven by a 13 percentage point rise in account ownership in developing countries and the role of technology,” it said.

“In particular, mobile money accounts in Sub-Saharan Africa are helping to rapidly expand and scale up access to financial services.

Along with these gains, data also show big opportunities for boosting financial inclusion among women and poor people,” it added.

Moving forward, challenges still remain in closing the gap between the “unbanked” and those who have access to financial services, the World Bank said.

“More than half of adults in the poorest 40% of households in developing countries were still without accounts in 2014. And the gender gap in account ownership is not significantly narrowing: In 2011, 47% of women and 54% of men had an account; in 2014, 58% of women had an account, compared to 65% of men,” the Washington-based lender said.

“Regionally, the gender gap is largest in South Asia, where 37% of women have an account compared to 55% of men (an 18- percentage-point gap),” it added.