House to look into BSP plan to expand services

MANILA, Philippines - The House of Representatives will inquire into the plan of the Bangko Sentral ng Pilipinas (BSP) to use pawnshops, remittance centers and similar establishments to expand financial and banking services.

“We will ask BSP officials to explain what this plan is all about,” Eastern Samar Rep. Ben Evardone, chair of the committee on banks and financial intermediaries, said yesterday.

“For instance, what are the banking services that pawnshops and remittance centers would be allowed to do? Would they handle deposit and withdrawal transactions? Would deposits be safe with these entities? What are the rates they would be permitted to charge? These and other questions we would like to get the answers to,” he said.

He said he finds the objective of the plan laudable, which is “to give people in remote towns and communities access to financial services.”

For his part, Camarines Sur Rep. Luis Raymund Villafuerte proposed the fielding by banks of “cash agents” to serve the banking needs of people in the countryside.

His proposal is contained in Bill 5629, titled “Bangko sa Baryo Act.” He said the bill aims to help the Duterte administration accomplish its goal of financial inclusion for all Filipinos.

Citing Asian Development Bank studies, Villafuerte said only 28 percent of Filipino adults have bank accounts and only 15 percent save money in a formal financial institution. Some 10 percent borrow money from formal institutions.

The proposed bank-in-the-barangay law would mandate banks and the BSP to properly train personnel before they are fielded as cash agents.

Villafuerte said these personnel would “perform a broad range of bank services, including forwarding account opening applications, cash-in and cash-out services and initial customer identity verification, especially for anti-money laundering and combating financing of terrorism efforts.”

“The ‘Bangko sa Baryo Act’ endeavors to attain financial inclusion for the Filipino people and to establish robust financial consumer protection frameworks,” he said.

The bill also aims to “increase citizens’ financial literacy and capability so they understand different financial services. Soon, an average barrio folk will be able to make sound financial decisions and put his hard-earned money to beneficial use with the assistance of authorized cash agents,” he said.

Under the bill, cash agents would enjoy various incentives such as waiver of government fees, free training and tax benefits. They would be accompanied by bank security personnel when doing business in the countryside – with the help of local police if necessary.

“The contracting bank shall ensure that it has an electronic banking solution to implement its cash agent operations and that the cash agent follows standard bank protocols and exercise due diligence when dealing with customers. Ultimately, the banks remain liable for agents’ actions,” Villafuerte said.