Philippines has lowest ATM density in region — BAP

Lawrence Agcaoili - The Philippine Star

MANILA, Philippines — The Philippines has the lowest automated teller machine (ATM) density in the region as the moratorium on transaction fees imposed by the Bangko Sentral ng Pilipinas (BSP) in 2013 has held back banks’ optimal performance in servicing and expanding their reach.

The Bankers Association of the Philippines (BAP) reported over the weekend the country has a 20 ATMs per capita of 100,000 cardholders as only 21,000 ATMs service 58 million cardholders nationwide.

This is only half compared to other countries in Southeast Asia led by Thailand with 94, Singapore with 49, Malaysia with 45, and Indonesia with 40 ATMs per capita of 100,000 cardholders.

BAP managing director Benjamin Castillo said the number of cardholders in the Philippines has been increasing for the past six years.

“Banks need to keep up with the maintenance and innovation of ATMs, as well as expansion of ATM network to accommodate the surge of ATM usage,” Castillo said.

The lead organization of universal and commercial banks in the Philippines reported the annual growth rate in ATM deployments declined to 6.4 percent after the BSP issued the moratorium on ATM transaction fees in 2013.

Prior to the moratorium, the Philippines booked a double-digit annual growth rate in ATM deployments with 13 percent.

On the other hand, BAP said ATM transaction volume continued to increase from 2014 up to the present. 

Apart from the physical ATM deployments, the organization said there are other expenses that banks incur from operational activities such as loading, servicing, complaints handling, reconciliation, software, capacity expansion and security.

BAP said that as some banks apply for adjustments in ATM transaction fees through the BSP as it is mandated to ensure that the costs are reasonable and beneficial to the banking public.

“We would like to assure the banking public of our commitment to serving them. We will collaborate with the regulators to ensure that ATM fees remain market-driven and reasonable, while continuing to provide convenience and security to the banking public,” Castillo said.

Furthermore, he explained an increase in ATM transaction fees for some banks would allow them to set up more ATMs in remote areas, enabling them to reach and to serve more bank clients, in line with the BSP’s financial inclusion initiatives.

Last August, the BSP vowed to scrutinize the applications of banks and financial institutions for higher ATM fees after the moratorium on adjustments imposed six years ago was lifted.

The BSP issued Memorandum 2019-020 reminding BSP supervised financial institutions to adhere to the principles of reasonable and market-based pricing in setting their ATM fees.

The Monetary Board through Memorandum 661 issued in April 2018 approved the lifting of the moratorium on ATM fees.

ATM fees currently imposed by banks average P13 per transaction as it range from P11 to P15 per transaction. The fees only apply if a bank client uses an ATM that is not owned by his or her bank.

Vicente de Villa, managing director of the BSP’s Financial Technology Sub-Sector, said during a hearing by the House committee on banks and intermediaries that clients could end up shouldering the cost of recuperations if ATM transaction fees are capped.

De Villa said market forces should dictate ATM transaction fees and allow clients to decide.

“On our end, what we espouse for is market-driven, reasonableness and transparency and keeping a very competitive market whose competition will play its role,” de Villa said during the hearing.

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