There may have been a time, decades ago, when it was considered a mark of basic financial security, something most people them seemed to aspire to do. These days however, the general sentiment is that not only is having a bank account of any sort not necessary to the “masa” crowd, it comes across as something superfluous that only well-heeled persons would bother with. Last year, the Bangko Sentral ng Pilipinas conducted a survey to figure out an estimate of how many Filipinos have opened bank accounts hand how many not. The results were telling of the disinterest in banking.
CNN Philippines reports that the Bangko Sentral’s 2017 Financial Inclusion Survey for this year concluded that an estimated 77%, or more than 3/4s of the adult population of the Philippines, do not have bank accounts. Those who did have accounts, which the BSP terms as “financially included”, amount to around 15.8 million or 22%. Financial inclusion involves a person being able to pay bills and household utilities, as well as send and receive money from others, through an owned bank account. In fact, account holders were even just a bit more in survey results of the previous year. The FIS was only started in 2015.
Other inquiries made in the Financial Inclusion Survey by the BSP include asking non-bank account holders their reasons for no deciding to be financially included. The top reason, comprising 60% of the responses, was simply that most people really do not have enough money saved to make a minimum deposit for their accounts. Almost one-fourths of the respondents gave no reason whatsoever, while another 18% cite the lack of legal documents required for opening bank accounts with. Other responses include the high minimum deposit requirements, unemployment and even a significant ignorance on how banks work.
Meanwhile, of the 22% adult Filipinos with bank accounts, half belong to the formal banking sector while the other is comprised of cooperatives, micro-financing NGOs and loan associations. E-money accounts like PayMaya and similar platforms are used by a pittance of over 1% Filipinos. In a remarkable turnaround, while many countries around the world have been recorded as having women being financially excluded, in the Philippines women are more likely to have active bank accounts than men do. In this regard, the BSP hopes to gain the interest of the so-called “unbanked” adult population by implementing more digital financing options.
It is also notable that among bank account-holding Filipinos, 46% are not fully confident in using e-money platforms. Their most cited reasons are concerns from news about hacking and security.
Image courtesy of iMoney