BanKO unveils first-ever LGU mobile banking

MANILA, Philippines - BPI Globe BanKO (BanKO) has launched the country’s first-ever mobile banking platform with a local government unit (LGU) and a local water distributor.

And with the help of a technical assistant (TA) grant worth $1.99 million from the United States Agency for International Development (USAID), the project will simplify payroll distribution for the 300 employees of the local government of Pulilan, Bulacan.

And the cost of paying the water bills for the 10,000 Pulilan households will fall dramatically, since the residents can use their mobile phones instead of having to travel to the payment centers.

BanKO is the country’s only thrift bank driven by mobile banking technology. It is a joint undertaking between the Bank of the Philippine Islands (BPI), Globe Telecommunications (Globe) and Ayala Corp.

BanKO president Teresita B. Tan said that the platform also allows Pulilan government employees to open a savings account with an interest rate of three percent, or a one-percent interest rate with free life insurance.

“It is financial empowerment through mobile technology that will result in savings for the LGU and the thousands of households using the local water district,” Tan said during the formal launching and activation of the mobile banking platform in Bulacan last Thursday.

The platform eliminates handling cost of transporting cash from Baliwag to Pulilan, and it reduces the risk of theft or robbery while payroll is in-transit in case of field-based employees.

It will result in no average daily balances, no need for vault, enclosure or security personnel to secure cash, simplified requirements for opening accounts, and increased access points through ATMs and neighborhood partner outlets.

For the residents of Pulilan, they do not have to physically go to the payment centers.

Pulilan Mayor Vicente Esguerra said that some of their residents spend more than P100 on transportation just to pay their monthly bills. “That will be eliminated with the mobile payment platform,” Esguerra added.

Meanwhile, USAID Philippines Deputy Mission director Reed Aeschliman said that the agency readily issued a grant worth $1.99 million to get the project started.

“Pulilan is the first (LGU) in the country to use mobile (banking technology) for salary and bills payment,” Aeschliman said. “In India, some $18 billion was saved by plugging leakages in salary payments using mobile payments.”

The grant was extended to the Pulilan project as an area, which had a critical mass in terms of local population, and the presence of large and small-scale businesses.

Pulilan plays host to 85 micro, small and medium enterprises (MSMEs) and large enterprises, employing over 6,700. There are more than 20 cooperatives also operating in the area.

Of the total number of businesses, 27 are major manufacturing businesses, which includes Purina Philippines Inc., Nestle Philippines Inc, Rebtrade Intl. Corp., Feedmix Specialists, Foster Foods Inc., Fisherfarms Inc., Tyson Agro-Ventures, Jockers Food Industry and TJN Pasalubong Victory Industrial Corp.

Meanwhile, Pulilan government employees and residents can get started with just P100 initial opening account, of which P50 is the initial cash in and the balance P50 is for the automated teller machine (ATM) card.

Bank official said that with the mobile money account, the facility provides several financial services from savings, sending and receiving money domestically, buying airtime load with rebates, buying micro-insurance, paying bills from utilities, regular insurance, school tuition and fees, and some government fees, and cashing in and out through partner outlets within the community. 

BanKO is also working on giving its accountholders access to credit, and purchase goods using their ATM cards.

Tan said that BanKO would soon be introducing international remittance services for families with overseas relatives, and domestic money transfer banking services for all of its existing 380,000 clients.