DESPITE the Bangko Sentral ng Pilipinas’s (BSP) efforts to raise the level of financial inclusion in the country, Filipino financial consumers apparently remain leery of putting their hard-earned cash in the vaults of banks with the number of account holders growing by less than 1 percent between 2015 and 2017, latest data from the Central Bank showed.
In its latest report on its 2017 financial inclusion survey, the BSP found out that the number of Filipino adults with a formal account is estimated at 15.8 million at the end of 2017.
This accounts for only 22.6 percent of the total adult population—what the BSP called a “modest” improvement from the 22 percent seen in the BSP’s maiden financial inclusion survey in 2015.
Among account owners, the top use case for their accounts is to save for emergency, accounting for 42 percent of the group, while 31 percent was for saving for education and 29 percent for business.
At least 23 percent of account holders during the period, meanwhile, use their account for safekeeping while 12 percent consider it as a form of investment.
On the other hand, of the 52.8 million Filipino adults who don’t have a bank account, 60 percent cited not having enough money as the primary reason.
This is followed by the perceived lack of need at 21 percent, and absence of documentary requirements at 18 percent.
Other reasons cited are high cost (10 percent), lack of knowledge in account opening (9 percent), lack of work or employment (8 percent), and lack of awareness (8 percent).
Still cautious of banks
While the survey showed that banks continued to have a higher share in account penetration at 11.5 percent, compared to non-banks such as Microfinance nongovernment organizations at 8.1 percent, the BSP found out that from 2015 to 2017, account ownership actually increased in Microfinance NGOs but decreased in banks.
In particular, among those adults with savings, a significant drop was seen among the percentage of Filipinos who opted to keep their savings with banks.
Formal savings accounts with banks dropped from 14.1 percent in 2015 to 9 percent in 2017, despite the increase in the country’s overall savings rate of 48 percent for 2017 from 43 percent in 2015.
The shift was seen to Microfinance NGOs, which saw a jump in patronage from 1.8 percent in 2015 to 7 percent in 2017.
The BSP said the account in microfinance NGOs refers to compulsory savings—also known as capital build up—which is usually required as a portion of the microfinance loan.
Also in terms of loan awareness, 96 percent of respondents surveyed by the Central Bank are aware that loans are offered in Microfinance NGOs, a higher number compared to the 64 percent which identified banks as a source of loans.
Image credits: Nonie Reyes