BSP targets to educate "unbanked" Filipinos

CEBU, Philippines - In its aim to further reach out to “unbanked” Filipinos, the Bangko Sentral ng Pilipinas intends to reinforce its commitment towards financial education through targeted programs for various sectors in the society, simpler messages and the power of media. It has been found out in its first Consumer Finance Survey that only two in 10 Filipino households have bank accounts while the remaining 78.5% of the total number of respondents were unbanked.

The CFS survey has a sample size of 10 520 households of which 3 872 came from the National Capital Region and the remaining 6 648 households were from Region 1, 7 and 11.

Among the areas outside NCR, Central Visayas has the lowest percentage of households owning a deposit account which was at 13.3%.

Among those with no deposit accounts, 92.8% of households cited that the main reason for such was that lack of money for bank deposits.

Some respondents also mentioned other reasons like they do not need a bank or cash account (1.7%), cannot manage an account (1.5%), minimum balance is too high (1.2%), and they do not like to deal with banks and institutions (1%).

BSP Assistant Governor for Monetary Policy Sub-Sector Ma. Cyd Tuaño-Amador said that such findings in the survey led the institution to come up with policy implications and recommendations to strengthen the financial education, attracting more people to get inclined with the formal financial system rather than the traditional ones.

She also said that it’s time for Filipinos to be financially educated and empowered to further understand what’s happening in the Philippine economy and where it is heading to. 

Aside from the usual and ongoing financial literacy campaigns, Amador added that more specific programs will be conducted specifically intended for Overseas Filipino Workers, students, working professionals and retirees.

She noted that although BSP has already made some headway in promoting and establishing an enabling policy and regulatory environment to increase access to financial services, the institution would continue to educate Filipino households on the advantages of saving in financial institutions, investing in various forms of financial instruments and bank financing as alternative to their traditional sources of financing.

To further reach to a greater number of Filipinos, she said that BSP shall make use of simpler but profound messages and visual representations through the power of media in the form of television and radio.

“We will continue to work on the stability and health of financial system so the Philippines would be a bank-centric country. We ensure the provision of a wide range of cheaper and safer products and services designed to cater to the financial needs of different market segments,” Amador continued.

For more than a decade, the BSP has been conducting financial learning seminars in different provinces all over the country.

In 2010, it also formulated an Economic and Financial Learning Program to integrate its various learning programs for the promotion of awareness and understanding of economic and financial issues to help the public acquire the knowledge and develop the skills needed to make well-informed decisions and choices.

Other policy implications formulated based on the survey results include “shadow banking” transactions and related regulatory and supervisory approaches to monitor system-wide exposure and coordination with government pension systems to encourage membership, regular/timely payment of premiums to national pension and retirement funds among household members.

Furthermore, the CFS survey revealed that eight in ten deposit accounts are placed in commercial banks (77.3%) while the remaining 22.7% were in rural/cooperative banks (8%), savings/thrift banks (5.3%), multipurpose/credit cooperatives (4.9%), microfinance banks (2.2%), savings and loan associations (1.3%), paluwagan (.5%), and others (.5%).

Region VII has the highest percentage of households maintaining their deposit accounts in saving/thrift banks compared to those in Region I and XI.

Majority of the Filipino households cited that the proximity of the bank to the place of residence is the primary basis in choosing a depository institution.