BSP cites importance of mobile money in times of disasters

MANILA, Philippines - Mobile money services are easily restored during natural disasters, thus allowing the affected users to recover faster with access to cash or credit, according to the Bangko Sentral ng Pilipinas (BSP).

BSP Deputy Governor Nestor A. Espenilla Jr. explained that mobile money services can be established faster than automated teller machines (ATM) and bank branches as seen in the case of areas devastated by Super Typhoon Yolanda.

“Mobile money services are easier to recover than that of ATMs since ATMs are mostly dependent on land-based communication infrastructure that can be damaged by disasters such as flood and earthquake. ATMs also require cash sourcing and loading, which can be very risky especially with what happened in Tacloban where peace and order became a problem,” Espenilla said in a forum.

Once mobile communications is restored, he said using mobile money would be safer than actually attempting to re-open a banking office when there are still security issues.

The monetary authority urged local agencies as well as financial institutions to promote the use of mobile money or electronic payments emphasizing that 93 percent of the country’s population are mobile phone users and that there is 99 percent cellular coverage around the country.

Smart Communications Inc. was cited as among the telecommunications companies offering mobile money services as working with the BSP and other financial institutions to further propagate the use of mobile money in the Philippines.

The scale of the devastation of Yolanda was such that many of the business establishments, including banks, were temporarily closed down in the typhoon’s aftermath. Lack of commercial power also made it impossible for residents in the affected communities to withdraw cash from ATMs.

“In the case of Yolanda, the parking areas of some banks became temporary encampments of survivors.

In the case of the Bohol earthquake, the safety and integrity of the building or office structures could not be easily assured especially if after-shocks are still occurring,” Espenilla said.

He cited that in cases where the business continuity plan would involve servicing the customers through the nearest banking office available, which may be quite a distance for the customer.

Using mobile money instead of actual cash would be more convenient in doing even the most basic transaction such as buying food and other basic goods at the nearest sari-sari store.

The Land Bank of the Philippines is one of the financial institutions that has embraced the use of mobile money technology. Landbank uses mobile money technology in the distribution of the conditional cash transfer (CCT) program.

Landbank was the first bank to resume ATM operations in Tacloban with Smart providing network connectivity.

It has also partnered with Smart in rolling out mobile cash transfers to the beneficiaries of the emergency cash-for-work program of the United Nations Development Program (UNDP).

This was initially deployed in Tacloban City last December.

More than 1,000 Yolanda survivors have already benefited from the UNDP mobile cash transfer program in other affected sites like Iloilo.