Chuchi G. Fonacier (right) and Augusto L. Dee, Banko Sentral ng Pilipinas managing directors, explain the national Strategy for financial inclusion of a press briefing.
Lack of access to banks still a major challenge
THE lack of access to banks and other financial institutions remains a major challenge in achieving financial inclusion in the Philippines, a central bank official said.
As of last year, there were more than 10,000 banking offices nationwide, the Bangko Sentral ng Pilipinas (BSP) said.
But around 600 cities and municipalities in the country were still unbanked, or unserved by banks. These comprised 36.5 percent of the 1,634 cities and municipalities in the country.
With the presence of financial service providers like moneychangers, pawnshops and e-payment providers, however, only 12% of the cities and municipalities remain completely unserved, said Chuchi G. Fonacier, managing director of the Supervision and Examination division of Bangko Sentral.
“Access is very important in the National Strategy for Financial Inclusion. That’s the first thing that should happen,” Fonacier said during yesterday’s consultation on the draft strategy.
Financial inclusion, seen as critical in reducing poverty and achieving inclusive growth, starts with having an account that allows people to store their money as well as make and receive electronic payments. This is measured by the Global Financial Inclusion (Global Findex).
Fonacier said several banks or financial institutions have committed to provide services in every city and municipality. She did not identify the banks.
Another problem is that many Filipinos opt against going to a bank or a financial institution to take out a loan or save their money.
About 68% of Filipinos who save money choose to keep their savings at home. Most loans also come from informal sources like family and relatives, rather than from formal institutions.
“Enabling regulations should come into play to address these challenges that we have identified,” Fonacier said.
The Bangko Sentral is conducting regional consultations on the draft National Strategy for Financial Inclusion, which aims to draw all Filipinos into the financial system. This is targeted to be finalized and launched in June.