MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) reported yesterday major gains in its financial inclusion program, but cited the Philippines remained one of the laggards in the region in terms of deposit accounts.
In its latest report on the state of financial inclusion, the central bank said access to and usage of formal financial products and services continue to improve in the country as the number of unbanked cities and municipalities stood at 571 in end-June last year, 38 lower than the 609 recorded in 2011.
This translated to a lower percentage of unbanked cities and municipalities to 34.9 percent of the 1,634 local government units (LGUs) nationwide in end-June last year from 37.3 percent of the total in 2011.
During the six-year period, the BSP said the number of banking offices grew by an average four percent to 11,343 in June last year, while the number of ATMs went up 12 percent to 19,500.
Likewise, the BSP reported there were more than 61,000 non-bank financial service providers nationwide, wherein growth was fastest among mobile money agents particularly retail outlets where people can convert cash to electronic money and vice versa.
It pointed out pawnshops, cooperatives, and microfinance non-government organization (NGOs) had wider presence than banks and were the most common FSPs in unbanked areas.
“Only one percent of LGUs remained unserved if non-bank FSPs were taken into account,” the BSP said.
The total amount of deposits, it said, grew at an average rate of 15 percent to P11 trillion as of end-June last year from 2012 with the number of depositors growing six percent to 44.4 million and deposit accounts rising four percent to 55.3 million.
Despite improvements in account ownership, the central bank pointed out the number of deposit accounts per 10,000 adults in the Philippines was still lower than most of the members of the Association of Southeast Asian Nations (ASEAN) except Cambodia, Laos and Myanmar.
Building on these modest gains, the BSP has issued new policies as part of efforts to pursue greater financial inclusion including a regulation allowing banks to put up “branch-lite” units to further expand the physical reach of banking services especially to unbanked and underserved LGUs.
Furthermore, it said authorities are also finalizing the policy framework that would encourage banks to offer a “basic deposit account” to address the usual barriers in account opening such as high opening amount and maintaining balance, dormancy charges, and lack of identity documents.
The BSP continues to harness the power of digital innovations through the National Retail Payment System project that aims to lessen the dependency on cash in carrying out financial transactions.