WHY are there fewer automated teller machines in the Philippines compared to other Southeast Asian countries? Local bankers said it is because of the regulatory hindrance to raise ATM transaction fees accordingly.
In a statement on Monday, the Bankers Association of the Philippines (BAP) said the moratorium on ATM transaction fees since 2013 has held back banks’ optimal performance in servicing and expanding their reach.
“The number of cardholders has been increasing for the past six years. Banks need to keep up with the maintenance and innovation of ATMs, as well as expansion of ATM network to accommodate the surge of ATM usage,” BAP Managing Director Benjamin Castillo said.
The bankers’ group estimates that only 21,000 ATMs service 58 million cardholders nationwide, which is equivalent to 20 ATMs per capita of 100,000 cardholders.
Meanwhile, Thailand has 94, Singapore has 49, Malaysia has 45, and Indonesia has 40 ATMs per capita of 100,000 cardholders, respectively.
In 2013, the Bangko Sentral ng Pilipinas (BSP) implemented a ban on increasing ATM fees on local banks. Earlier this year, however, the Central Bank lifted the moratorium.
Annual growth rate in ATM deployments averaged at 13 percent prior to 2013 but since then declined to 6.4 percent, while ATM transaction volume continued to increase from 2014 up to the present, the BAP said.
However, the banks’ desire to hike the ATM fees following the lifting of the moratorium created a public outcry and sparked a Senate inquiry earlier this year.
“We would like to assure the banking public of our commitment to serving them. We will collaborate with the regulators to ensure that ATM fees remain market-driven and reasonable, while continuing to provide convenience and security to the banking public,” Castillo said.
The increase in ATM transaction fees for some banks will let them set up more ATMs in remote areas, enabling them to reach and to serve more banking clients, in line with the BSP’s financial inclusion initiatives, the BAP said.
Image credits: Nonie Reyes