Bangko Sentral ng Pilipinas Governor Benjamin Diokno said over the weekend financial inclusion will gain traction following the signing of Executive Order No. 162 by President Rodrigo Duterte institutionalizing the acceptance of the Philippine Identification System number as sufficient proof of identity and age in government and private transactions.
Diokno said the EO would encourage Filipinos, especially the marginalized and those from low-income households with no government-issued IDs, to open bank accounts, paving the way for their inclusion into the formal financial system and reducing their vulnerability to onerous lending and other practices.
“EO No. 162 is supportive of the Duterte administration’s thrust to eliminate red tape in government transactions,” Diokno said.
EO No. 162 specifies that no additional proof of identity or age would be required upon presentation of the PhilID, PhilSys number or PSN derivative, as authenticated.
The same may be presented in lieu of a birth certificate for transactions that require individuals to establish their age, including applications for marriage licenses and Land Transportation Office student permits and conductor’s licenses; enrollment for kindergarten, first grade and Philippine Educational Placement Test passers; and Professional Regulation Commission and Bar licensure examinations.
The BSP issued Memorandum No. M-2021-057 on Oc. 21, 2021, reminding BSP-supervised financial institutions to accept the PhilID in both physical and mobile formats as sufficient proof of identity.
It also directed its supervised financial institutions to include the PhilID in their list of valid IDs displayed on their counters and/or at the public entrance of their establishment, if applicable (such as counters, windows, and entrances); and official websites, social media handles and other consumer information channels.
“The issuance of BSP Memo No. M-2021-057, pursuant to Republic Act No. 11055 or the PhilSys Act, supports the wide scale opening of transaction accounts, particularly the basic deposit account that is designed to meet the needs of the unbanked and promote greater financial inclusion,” Diokno said.
Basic deposit account is a deposit product that meets the need of the unbanked and low-income sector for an affordable and easy-to-open account. It has a low opening amount of P100 or less, no maintaining balance, no dormancy charges, and simple identification requirements.
Data showed that as of the third quarter of 2021, 3.6 million new basic deposit accounts were opened from the fourth quarter of 2019, while active e-money accounts increased by 16.8 million between yearend 2019 and 2020.
About 7,384,553 PhilSys registrants opened transaction accounts for free through registration sites under the co-location agreement between the Philippine Statistics Authority and the Land Bank of the Philippines as of Jan. 31, 2022.
The PSA will soon launch a mobile version of the PhilID as a digital alternative to the physical PhilSys card and the PSA Quick Response Code Verification System, which will promote broader and seamless acceptance of the PhilID by financial institutions for various services.