MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has tied up with 12 of the country’s largest bank to further improve the low savings rate by encouraging Filipino children to learn how to save at an early age.
BSP Governor Amando Tetangco Jr. said the signing of a memorandum of agreement (MOA) on “The Banking on Your Future” Kiddie Account Program of the Bank Marketing Association of the Philippines (BMAP) with 12 universal, commercial, and thrift banks last Friday aims to raise the country’s savings rate.
Tetangco said the country’s savings rate – computed as gross savings as a percentage of gross national product – remained low growing only to 26.6 percent in 2009 from 22.9 percent in 2001.
As of March, data from the BSP showed that there are 36.3 million deposit accounts with combined deposits amounting to nearly P5 trillion. This translates to P139,000 worth of deposit per account.
However, he lamented that 64 percent or 23.3 million of the total accounts have balances of only P5,000 and below.
“BSP estimates that barely half of Filipino adults have savings account. At the same time, a survey conducted about seven years ago… indicated that less than five percent of Filipino children save on a regular basis,” he added.
According to Tetangco, the Kiddie Account Program would help improve the statistics as there are at least 12 million or 92 percent of grade school pupils are enrolled in public elementary schools all over the country.
“There is so much potential here,” he said.
He also thanked the 12 participating banks for investing time and resources to help Filipino children up to 12 years old develop the habit of saving regularly.
“These banks welcome children with one hundred pesos or less to open savings accounts with them speak well of their long-term commitment to develop an inclusive Philippine financial system and a new generation of Filipinos who are regular savers,” he said.
The 12 participating banks have a combined network of about 3,000 branches.
Latest data from the BSP showed that the total number of banks operating in the Philippines went down by 33 to 746 in the first quarter of the year from 779 in the same quarter last year.
While the number of universal and commercial banks was steady at 38 and the number of thrift banks was also unchanged at 73, the number of rural banks decreased to 635 in the first three months of the year compared to 667 in the same period last year.