Expand financial services, BSP urges banks

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) urged banks anew to help pursue financial inclusion and integration in the country to give Filipinos more access to financial services.

BSP Governor Amando Tetangco Jr. told members of the Bankers Institute of the Philippines (BAIPhil) both financial inclusion and financial integration pose challenges as well as vast opportunities.

 “BAIPhil itself must navigate through a fast-evolving market landscape, appreciate and relate all the strands of change, if you are to become an effective venue for continuing education,” Tetangco said.

He pointed out training and education should be more akin to telling a good story with different chapters and should not be only about holding lectures and workshops.

 “At the level of each bank, choices must be made today so that you can maximize competitive advantages that you expect will be your strength in the future. At the level of the industry, this requires an unwavering commitment to continuing education, to appreciate nuances without losing sight of the overall policy agenda of institutionalizing change that can strengthen the system and its institutions,” he added.

He said, results of national baseline survey on financial inclusion revealed only four out of 10 Filipinos save and roughly 30 percent of those who save do in banks while nearly 70 percent keep their money at home.

He added six out of 10 adults with bank accounts indicated that the bank’s reputation is their number one consideration in opening a deposit account. Around 50 percent of respondents mentioned interest rates as another major consideration followed by minimum maintaining balance with 45.9 percent.

Furthermore, the survey showed that 47 percent of Filipinos borrow money, of whom 72 percent borrow from family, friends and informal lenders. 

The BSP chief said banks as source of borrowing stood at only 4.4 percent, lower than lending/financing companies with 12 percent, cooperatives with 10.5 percent, microfinance NGOs with 9.9 percent, and government entities with 6.1 percent.

The survey showed that more than 85 percent of respondents indicate that they want to access financial services from formal institutions.

Likewise, the BSP chief encouraged banks to take advantage of the opportunities under the Association of Southeast Asian Nations (Asean) Banking Integration Framework.

As part of the Asean financial integration – Qualified Asean Banks (QABs) would be awarded equal treatment as domestic banks in the host country under the principle of reciprocity. 

“This may lead to increased competition in the financial system as QABs may venture into markets which our banks have been comfortably serving in the past.

Tetangco said Philippine banks could expand its presence overseas under the integration program.

“Our banks will also have the opportunity to expand to other countries in the region and find new markets. Added competition will challenge banks to further improve their operations and venture to new markets,” he said.