House OKs Bangko sa Baryo Act, deployment of 'cash agents' to remote areas

By Charissa Luci-Atienza

The House Committee on Banks and Financial Intermediaries unanimously approved on Wednesday a bill allowing banks to deploy"cash agents” to cater to the banking needs of people living in remote areas.

House of the Representatives (ALVIN KASIBAN / MANILA BULLETIN / FILE PHOTO) House of the Representatives (ALVIN KASIBAN / MANILA BULLETIN / FILE PHOTO)

In less than five minutes, the House panel, chaired by Quirino lone district Rep. Junie Cua, passed House Bill No. 1297, the proposed "Bangko sa Baryo Act," principally authored by Deputy Speaker and Camarines Sur 2nd district Rep. Luis Raymund "LRay" Villafuerte.

It was Trade Union Congress of the Philippines (TUCP) party-list Rep. Raymond Democrito Mendoza who moved for the approval of the bill, which has been pending since the 17th Congress.

The approval of HB 1297 was made at the sidelines of the House panel's virtual deliberation on the proposed amendments to the Charter of the Philippine Veterans Bank (PVB) on Wednesday.
During the virtual hearing, Deputy Speaker and Misamis Occidental 2nd district Rep. Henry Oaminal, chairman of the technical working group (TWG) that tackled the bill, informed the Cua panel that it has endorsed his panel's report on HB 1297 for its consideration and approval.

"This technical working group is forwarding to the mother committee the draft report which is in the position of the Committee Secretary which endorses en toto the original version of House Bill which was introduced by Deputy Speaker LRay Villafuerte Jr.," he said.

He noted that during their TWG meeting last November 26, 2019, they "received an expression of support" from the Bangko Sentral ng Pilipinas (BSP) and the Department of Finance (DOF).

Before the panel proceeded with the virtual voting, Cua thanked Oaminal "for your effort and time you have spent in shepherding this bill."

"I think it is ripe for an approval unless there are comments from our members subject maybe to fine-tuning, refining, and styling," he said.

Since 2017, Villafuerte has been seeking the passage of his proposed “Bangko sa Baryo Act," citing that more than 36 percent of all municipalities in the country "have no banking presence."

He noted that new BSP guidelines and regulations now allow banks to deploy cash agents, especially in far-flung and unserved areas to deliver banking services.

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

HB 1297 mandates the cash agents to assist in performing 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.

Villafuerte said the bill will promote saving and investing among Filipinos, of whom 60 percent remain unbanked, according to World Bank estimates.

Quoting Asian Development Bank studies, he noted that only 28 percent of Filipino adults own a bank account and only about 15 percent save money with a formal financial institution over a 12-month period, while only 10 percent borrow money from formal institutions over a similar time frame.

The deputy speaker for finance said his measure mandates cash agents to undergo rigid screening procedures by the contracting bank and the BSP before they can be authorized to perform such functions to ensure that they have a clean credit history and reputation.
“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 their agent's actions,” he said.

The bill provides that cash agents who establish their operations in remote areas will enjoy various incentives such as waiver of government fees, free training for personnel, and tax benefits, among others.