Not a good time to raise banking fees

Published February 13, 2021, 12:14 AM

by Tonyo Cruz

HOTSPOT

Tonyo Cruz
Tonyo Cruz

A banking industry report said that “as of September, 2020, the total operating income of universal and commercial banks in the Philippines amounted to approximately ₱601.7 billion. Operating income is the company’s profit after deducting operating expenses in the country.”

Unlike many other businesses that were forced to close last year, the country’s banks continue to thrive amid the coronavirus pandemic. 

BPI reported ₱21.4 billion, while Unionbank said it took in ₱11.6 billion for the entire 2020. 

For the first three quarters of 2020 alone, BDO reaped ₱12.3 billion, Metrobank ₱11 billion, China Bank ₱8.2-billion, Security Bank ₱6.7 billion, PNB ₱3.9 billion, and PSBank ₱3.21 billion.

This kind of net income is a far cry from the economic conditions of many Filipinos. First, we faced mass layoffs, retrenchments, and wage increase freezes. Then, there are new and bigger expenses arising from the lockdowns and the world’s longest continuing quarantine. Since last year, Filipinos have been bearing the brunt of rising food prices.

Many are thus furious that some banks are acting as if there’s no longer any pandemic gripping the country and the world with their plans to start charging for electronic bank transfers and to raise ATM usage fees. The Bangko Sentral has not stopped them from doing so. Ditto for Congress and the Executive.

ATM usage fees, bank transfer fees, and other bank-related fees continue to be a scourge to depositors. While banks save a lot from reduced manpower due to digitalization through modern interconnected branch networks, ATM networks, and online/mobile banking, and encourage depositors to avail of these digital modes of banking, bank have a long list of fees.

Years before the internet and modernization of banking operations, depositors understood fees for inter-branch, inter-regional, and inter-bank deposits, withdrawals and other transactions. They accepted that there are costs to pay for such transactions. But nowadays, when digitalization has gotten rid of many steps, stumbling blocks, difficulties, and red-tape, such transactions are possible in an instant. Thus, depositors are furious that banks touting themselves as digital are allowed to charge fees for transactions that are now built-in, possible and instantly-accessible to the bank.

A depositor would have to deposit a whole lot of money in a bank and keep it there for a long time before he or she recovers the equivalent of a single bank transfer fee or an ATM usage fee. The interest rates from Philippine banks could be as low as one fourth or one fifth of one percent. 

Payroll accounts are good for the biggest banks and many big employers, but the workers and employees mostly get a bad deal. Withdrawals are slapped withdrawal charges, for the “privilege” of conveniently getting their own hard-earned money. Perhaps watchdogs and Congress could look into ATM fees that continue to rise and may have allowed all banks to recoup whatever acquisition and maintenance expenses they may have spent for those machines.

There are new banks and some big banks launching their own digital-only banks that charge few or no fees at all. Many depositors have been discovering them and transferring their accounts to these new digital banks. But the power and influence of the big banks tend to undercut these digital banks through the charging of new and higher fees for inter-bank transactions. One example is the schedule of new, higher fees for ATM usage.

These fees continue to be a disincentive to people to keep their money in banks, and a factor in why we still have a lot of Filipinos who refuse to open bank accounts. 

Banks continue to give big companies hundreds of millions in loans, without any fear of default. Government is also availing of bank services as the conduit for billions for pandemic-related expenditures. If ever the government raises the stakes and rolls out stimulus packages for small and medium-scale businesses, and economic aid for the working people, the money would still find their way to banks for disbursement. That’s more money to circulate, invest, and profit from for any bank. 

They’ve been doing it to their biggest clients, so banks could also roll out loan programs for SMEs and entrepreneurs, loan condonation programs, and loan forgiveness, apart from providing the banks’ own employees with new salary increases and other benefits commensurate to their contributions to the company. We hope to see banks signing new collective bargaining agreements with their employees. 

 

 
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