THE CENTRAL BANK has told lenders to accept the national ID as a sole proof of identity for those who want to open accounts to help Filipinos who have been prevented from joining the formal financial system by this documentary requirement.
Memorandum No. M-2021-035 signed by Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said BSP-supervised financial institutions could face penalties if they refuse to recognize a national ID card or the Philippine Identification System (PhilSys) as proof of identity for their Know-Your-Customer (KYC) process.
“Consistent with PSA (Philippine Statistics Authority) Advisory dated May 19, 2021, the PhilSys ID should be accepted as official and sufficient proof of identity without the need to present any other identification documents,” the BSP memorandum said.
The BSP said Republic Act 11055 or the Philippine Identification System Act imposes a P500,000 penalty for entities or persons that refuse to recognize the national ID as the only identification of a holder “without just and sufficient cause.”
BSP-supervised financial institutions are also allowed to do online or offline authentication procedures to verify the identity of an individual presenting their national ID as proof of identity.
The central bank told financial institutions to consider advisories that will be issued by PSA regarding digital authentication and electronic KYC using fingerprint, iris, facial, one-time passwords, or demographic verifications.
Data from the Philippine Statistics Authority showed nearly 104,000 national IDs were already distributed as of May 15. These were delivered by the Philippine Postal Corp.
The government is targeting to register 50 to 70 million Filipinos to the PhilSys by the end of this year.
The national ID is expected to benefit the marginalized and low-income sector as registration is free of charge versus other government IDs that require fees.
More than two-thirds of Filipino adults remained unbanked in 2019. A central bank study found that lack of documentary requirements (26%) is a major factor that prevents Filipinos from opening a bank account, next to lack of money (45%) and the view that they do not need an account (27%).
Prior to the national ID, financial institutions required at least two valid government IDs to open an account. — L.W.T. Noble