Bangko Sentral ng Pilipinas Gov. Eli Remolona Jr. is confident that the target of having 70 percent of adult Filipinos own a bank account by the end of the year remained achievable.
In his speech during the BSP 30th anniversary reception for the Banking community Friday night, Remolona said the payment system is one of the challenges the country is facing, aside from the elevated inflation rate.
The BSP’s financial inclusion survey in 2021 showed that 56 percent of adults in the country have a bank account, a significant increase from only 23 percent in 2017.
“We’re confident we will reach our target of 70 percent by this year,” Remolona told the bankers.
“We’re not stopping here. These accounts should provide the opportunity for people to build savings buffers, invest in their future and more actively participate in the digital economy. Programs like Paleng-QR help digitalize crucial value chains of merchants and SMEs,” he said.
The BSP also aims to have half of the retail payments in the country digitalized by the end of the year.
“At last count, 42 percent of retail payments were in digital form. This is up from just one percent ten years ago. That proportion should hit our target of 50 percent this year,” he said.
He said the BSP has given licenses to 258 digital payment providers.
Over time, he expects competition and network effects to result in a system where the most innovative, efficient and responsible providers truly respond to the needs of customers.
“This digitalization has been a pathway to financial inclusion. More Filipinos are now part of the formal financial system,” he said.
The government has been working toward greater financial inclusion in the last few years— launching the National Strategy for Financial Inclusion in 2015 and establishing the high-level Financial Inclusion Steering Committee or FISC in 2016 to drive the strategy.
The COVID-19 pandemic, coupled with fast-paced developments in the digital financial landscape, have brought to fore a need for a recalibrated financial inclusion strategy.
The National Strategy for Financial Inclusion 2022-2028 aims to facilitate a coherent, well-coordinated, whole-of-nation undertaking toward the achievement of its vision of inclusive growth and financial resilience for every Filipino.
The National Strategy for Financial Inclusion 2022-2028 report earlier said that financial exclusion disproportionately affects millions of Filipinos in the lower income classes and those who are unemployed, less educated, and belonging to the younger generation.
Other underserved and unserved segments include senior citizens, migrant workers and their families, persons with disabilities, indigenous peoples, forcibly displaced persons, those who are excluded due to their religious beliefs, and other marginalized segments.
Financial exclusion is also prevalent in the agriculture, MSME, and startup sectors as well as among informal workers. About 7 in 10 adult Filipinos are financially excluded, according to the 2019 Financial Inclusion Survey of the BSP. This is based on the part of the adult population who own a transaction account that can be used to store, send, and receive funds.
A significant gap in account penetration is seen especially in terms of socioeconomic class and employment status. Only 27 percent of those in the lower class (E) have an account, compared to 72 percent among the upper class (ABC).
Employed individuals are twice as likely (39 percent) to own an account than those who are unemployed (19 percent).
Unlike in most countries, women in the Philippines are more financially included than men based on indicators such as account ownership, savings, credit, insurance, remittance, and making payments.
Disaggregation of account ownership data by type of account in 2019, however, showed that for bank accounts, men have a higher ownership level (13.8 percent) compared to women (10.7 percent).
In financial investment, the gender gap favored men: only 18.9 percent of women had investments, which is lower than the 30.3 percent for the men. There was also a wide gap in 2019 in receiving payments: more than half of the men (51 percent) compared to 35 percent of the women. This gap coincides with employment status, as most of the payments received are in the form of wages and salaries.
This is also reflective of the gender gap in the labor force participation rate, which was higher among men at 76.1 percent compared to women at 52.3 percent as of November 2021.
In 2018, the BSP also introduced the Basic Deposit Account, 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.
