Pinoys prefer e-wallets more than bank accounts — Moody’s
![Pinoys prefer e-wallets more than bank accounts � Moody�s](https://media.philstar.com/photos/2021/12/11/moodys2021-03-2919-18-03_2021-12-11_18-21-46.jpg)
MANILA, Philippines — Financial technology (fintech) companies continue to threaten Philippine banks that remain slow in developing digital services, Moody’s Investors Services said in a report.
The debt watcher said the penetration of mobile wallets in the Philippines has surpassed that of bank accounts, adding that the number of debit cards per 1,000 adults has decreased 22 percent since 2015.
“Slow development of digital services by Philippine banks weakens their growth prospects,” Moody’s said.
It said the Philippines would continue to benefit from the growth in working-age population due to its favorable demographics, supportive operating environment for retail loan growth and social stability.
“While the combination of these factors is similarly promising in the Philippines, banks in this country remain slow in developing digital services, leaving room for growing fintech companies to threaten banks’ position in key areas of the retail segment,” it added.
The credit rating agency said India and Indonesia, the world’s second and fourth most populated countries, would see their work force grow a further 17 percent and 14 percent, respectively, in the next two decades.
This would provide a favorable backdrop for the growth of banks’ profitability in India and Indonesia.
“In the majority of emerging markets, banks will continue to benefit from the expansion of working-age populations. Yet the demographics of those countries pose their own risks for banks,” Moody’s said.
On the other hand, in a small but growing number of emerging markets, Moody’s said the aging of populations would make it difficult for banks to grow and improve profitability, although there are factors that mitigate the impact of the demographic changes.
Under its Digital Payments Transformation Roadmap, the Bangko Sentral ng Pilipinas (BSP) has committed to convert 50 percent of total retail transactions to electronic channels and increase the number of Filipino adults with bank accounts to 70 percent by 2023.
Last Aug. 19, BSP Governor Benjamin Diokno announced the Monetary Board has approved the closure of window for establishment of digital banks and limiting the number of licenses to seven.
The moratorium allows the regulator to monitor the performance and impact of digital banks on the banking system and their contribution to the financial inclusion agenda.
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