THE Bangko Sentral ng Pilipinas (BSP) saw lenders put up smaller branches last year, as it hopes improvements in financial inclusion will be achieved with recent regulations that boost account ownership and digital payments.
In a statement on Friday, the central bank reported that 155 lenders out of 581 head offices have established 1,751 branch-lite units as of end-June 2018.
The branch-lite units are now operating in 738 local government units, of which 151 areas are being served by branch-lite units alone.
In its bid to boost financial inclusion, the central bank has allowed banks in December 2017 to set up branch-lite units, which are dressed-down and less formal offices compared with the typical brick-and-mortar bank offices.
This setup provides lenders flexibility to set up branches that are cheaper to build, which can be placed in towns and cities that are unbanked or underserved.
The option of banks to set up branch-lite offices is one of the innovations the central bank implemented under the National Retail Payments System (NRPS), apart from the basic deposit account framework released in February 2018.
With these, the central bank is confident that significant improvements in including unbanked Filipinos into the formal financial system will be achieved.
According to the BSP’s State of Financial Inclusion in the Philippines 2017 report, the number of unbanked local government units declined to 554, which accounted for 33.9% of the total, in 2017 from the 582 areas recorded in 2016.
Meanwhile, deposit accounts grew 6.8% to 57.1 million in 2017, from 2016’s 53.5 million.
The BSP launched the NRPS framework in 2015 with the objective of promoting a “cash-lite” economy wherein financial transactions will veer away from cash and checks, and toward electronic fund transfers and digital wallets.
The BSP targets to raise the share of digital payments to 20% of the total transactions by 2020 from a measly one percent in 2013. — Karl Angelo N. Vidal

RELATED ARTICLESMORE FROM AUTHOR