By LEE C. CHIPONGIAN
The Bangko Sentral ng Pilipinas (BSP) is aiming to increase to 70 percent in three years the number of Filipino adults having formal bank accounts with basic deposit account (BDA) products.
With the number of BDA depositors rising by 621 percent year-on-year in the third quarter 2019 to 3.087 million from 428,243, BSP Governor Benjamin E. Diokno said this rate of fast growth gives them the confidence to aim for a 70 percent target by 2023 in the number of adult Filipinos with formal accounts versus only 34.5 percent in 2017 based on the World Bank Global Index.
“We’re very confident (of reaching 70 percent) if not higher by 2023,” Diokno told reporters. He said that to date, about 119 banks already offer BDA to tap the low-income sector.
The national ID, which the BSP is producing, is also crucial in achieving the 70 percent target of Filipinos with formal accounts, said Diokno.
The BSP’s printing of the national identification (ID) cards, according to Diokno, will provide Filipinos – especially the currently unserved – the means to establish a “verifiable digital identity which will enable them to open bank accounts, use financial services more efficiently, and gainfully participate in an increasingly digital economy.”
With the national ID, which was made possible by the Philippine Identification System, a person will only be asked to present one ID. The BSP has committed to print 116 million national IDs in three years.
BSP Managing Director, Pia Bernadette Roman-Tayag of the Center for Learning and Inclusion Advocacy, said that aside from the BDA, what would also help reach the goal of 70 percent depositors penetration is the increase in the number of cash agents. These are pawnshops, convenience stores, and other retail outlets.
Roman-Tayag said Filipinos can open a BDA from these low-cost initial touchpoints which are tapped by banks. There are now 11 banks with 17,000 cash agents combined.
Another compelling reason to achieving the target is the BSP’s flagship National Retail Payments System (NRPS), she said. BSP’s bid to expand its financial inclusion agenda lies on NRPS which is intended to further encourage economic and business growth via the use of an inter-operable, safe, and efficient real-time digital payments system.
Diokno said financial inclusion in the country has gained new momentum with the BDA which is a “democratized access to a transaction account” while the NRPS and cash agents are the support system for retail payments and low-cost touchpoints.
Based on the latest data, there are now 90,000 access points for banks with cash agents. The percentage of local government units with at least one access point are now at 95.8 percent.
However, data showed that for every 10,000 adults however only two banks could serve them, highlighting the need for a larger network of banking access. In the meantime, 10,000 adults also share, on average, just three ATMs amongst them. But, there are other access points, such as 27,993 e-money agents, 13,497 pawnshops, and 6,818 money service businesses.
By BSP definition, a BDA is an interest- or non-interest-bearing account designed to promote financial inclusion. The minimum key features of the basic deposit account include an opening amount of less than P100; no minimum maintaining balance; and no dormancy charges.
Banks with BDA enjoy zero reserve requirement ratio as perks. However, the BSP will impose reserves when the account balance exceeds ₱50,000 to prevent misuse of basic deposit account. When it is more than ₱50,000, the host bank will convert a basic deposit account to a regular account.
BDAs also enjoy reduced KYC or “Know Your Customer” requirements but the moment the balance increases above the threshold, they will automatically be shifted to an enhanced KYC scrutiny.