STATE-run bank Land Bank of the Philippines announced over the weekend the launch of their basic deposit account (BDA) program in an effort to bring more unbanked and underserved Filipinos into the country’s formal banking system.
Aimed at students, public utility vehicle drivers, vendors, household helpers, farmers and fishermen, Landbank’s new product allows customers to open a deposit account with P1 as minimum initial deposit and up to a maximum of P50,000 account balance.
The program—called PISO account or “Perang Inimpok Savings Option”—is being offered to individuals without an existing LandBank deposit account and have no capacity to open a regular deposit savings account with higher initial deposit and maintaining balance requirements.
The depositor is only required to submit one valid identification card or any barangay certification, clearance or ID for verification.
According to the 2019 Financial Inclusion Survey (FIS) of the Bangko Sentral ng Pilipinas (BSP), about 7 in 10 adult Filipinos are financially excluded. This means that about 70 percent of the country’s adult population is either unbanked or underbanked.
This is based on the part of the adult population who own a transaction account that can be used to store, send and receive funds.
A significant gap in account penetration is seen especially in terms of socioeconomic class and employment status.
Only 27 percent of those in the lower class have an account, compared to 72 percent among the upper class.
Also, employed individuals are twice as likely (39 percent) to own an account than those who are unemployed (19 percent).
“We continue to develop accessible and convenient banking products relevant to the diverse needs of our customers, including the unbanked and underserved,” LandBank President and CEO Cecilia C. Borromeo was quoted in a statement as saying.
Accountholders of the new product can access the bank’s digital banking channels and its mobile banking application for fund transfer, bills payment and balance inquiry services.
They can also use the PISO account in any LandBank, BancNet and 7-Eleven Automated Teller Machines, domestic point-of-sale terminals and for over-the-counter transactions in their respective Landbank branch of account.
In 2018, the BSP introduced BDAs. 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 processes to open, no maintaining balance, no dormancy charges and 0-percent reserve requirement for the bank.
The BDA was created to meet the needs of the unbanked and low-income sector and foster greater financial inclusion.