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BSP: 4-m new basic deposit accounts opened in pandemic

MILLIONS of Filipinos opened basic deposit accounts (BDA) since the nationwide lockdown was implemented, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said, as people are being forced by the Covid-19 to do away with cash and more into online financial transactions.

“During the pandemic, over 4 million new accounts were opened via digital platforms, along with new online sign-ups and app downloads for digital financial services [DFS],” Diokno said in a recent speaking engagement.

These BDAs are accounts designed by the BSP to encourage more people to open bank accounts and promote financial inclusion. Among its key features include simplified know your customer (KYC) processes to open, no maintaining balance, no dormancy charges, and zero percent reserve requirement for the bank.

In 2018, the BSP allowed banks to offer these BDAs. By the end of that year, BDAs reached 428,000.

The surge in the opening of BDAs was tied up with the rise of online transactions due to movement and travel restrictions. These BDAs are usually used as “transaction accounts.”

“A transaction account serves as the gateway to financial services. With it, a user can store funds and electronic payments then eventually avail of more products such as credit, insurance, and investments,” Diokno said.

BSP’s 2019 Financial Inclusion Survey (FIS) showed that account ownership also increased to 29 percent from 23 percent in 2017. The six-percentage point increase translates to 5 million new accounts in just two years.

Also, among the poorest, account ownership hit 27 percent, closer to the national average and nearly double the 14 percent previously reported.

E-money accounts drove the overall growth in account ownership, increasing to 8 percent from 1 percent. Account usage more than doubled to 39 percent from 18 percent.

Uptake of other financial services also increased in the same two-year period of 2017 to 2019: formal credit rose to 19 percent from 14 percent; insurance to 23 percent from 18 percent; and investment to 25 percent from 23 percent.

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