Low cost, no frills deposits up 8.5 % to P5.1 billion in 2021

MANILA, Philippines — The low cost, no frills deposit accounts went up by 8.5 percent to P5.1 billion last year from P4.7 billion in 2020 as the Bangko Sentral ng Pilipinas (BSP) continues to step up its financial inclusion and digitalization initiatives.

Latest data from the central bank showed the number of basic deposit accounts (BDA) increased by 19.7 percent to 7.9 million from 6.6 million, with 138 banks now offering low cost and no frills deposit accounts.

The BSP introduced the BDA in 2018 to meet the needs of the unbanked and low-income sector and foster greater financial inclusion. It is a deposit product that has a low account opening balance requirement of P100 or less, no maintaining balance, no dormancy charges, and simple identification requirements.

Banks usually customize their BDA products by utilizing technological innovations to on-board and service clients.

Last November, the regulator dangled incentives including the reduction of annual supervisory fees for two years and the waiver of central bank fees to banks which ramp up their BDA portfolio.

Under Resolution 1580 issued by the Monetary Board, incentives include the lowering of the annual supervisory fees for 2022 and 2023 by reducing the bank’s average assessable assets by the average amount of basic deposit account maintained in the preceding year.

Likewise, the BSP fees related to the application of advanced electronic payment and financial supervision (EPFS) would be waived for 2022 for banks that intend to use the service to support the offering of basic deposit accounts.

Banks allow the opening of BDA even without the presentation of identification (ID) cards as long as customers submit duly signed and notarized certification, either in physical or electronic form, that he or she has no valid ID.

The activities of the BDA are subject to ongoing monitoring by banks to identify potential abuse of the relaxed requirement and suspicious transactions should be reported to the Anti-Money Laundering Council (AMLC).

Under the Digital Payments Transformation Roadmap, the BSP aims to increase the number of Filipino adults with bank accounts to 70 percent and convert 50 percent of total retail transactions to electronic channels by 2023.

“On digital transformation, the BSP’s policy agenda include digitalization of the country’s payments system. As the economy gradually reopens, we seek to further promote innovative contactless payment technology and onboard more Filipinos into the formal financial system,” BSP Governor Benjamin Diokno said earlier.

The BSP is confident of achieving the twin goals under the roadmap.

According to Diokno, the number of banked Filipino adults increased to 53 percent as of the end of the third quarter of 2021, while the share of digital payments to total retail transactions reached 20.1 percent in 2020.