E-money pushes more Pinoys to get accounts in banks, other financial institutions

ABS-CBN News

Posted at Jul 16 2020 05:40 PM

ABS-CBN News file photo

MANILA - The Bangko Sentral ng Pilipinas said Thursday the country made significant progress in financial inclusion as 5 million more adult Filipinos now had accounts in banks, e-money issuers and microfinance institutions as of March this year compared to 2017.

The BSP said the share of Filipino adults who own an account climbed to 29 percent in 2019 from 23 percent in 2017, based on the 2019 Financial Inclusion Survey (FIS) conducted in February to March this year just before the country went on lockdown due to the COVID-19 pandemic.

“Accordingly, the survey results - even as they already suggest significant progress - do not yet reflect the accelerated adoption of digital financial services seen in the midst and in the wake of the pandemic,” the BSP said.

Growth was largely driven by e-money accounts which rose to 8 percent in 2019 from 1 percent in 2017. MFI accounts also grew from 8 percent in 2017 to 12 percent, while the number of bank accounts barely moved from 11.5 percent in 2017, the BSP said.

The share of account holders who use their account for payment transactions, such as fund transfers and bills payment, more than doubled to 39 percent in 2019 from 18 percent in 2017, the BSP said.

There was still a lot of room for growth for digital banking and payments, the BSP said. The survey showed that 69 percent of adults have a mobile phone while 53 percent use the internet.

“However, only 12 percent of mobile phone owners and 9 percent of internet users use their mobile phones and the internet for financial transactions,” the BSP said.

Seven in 10 unbanked adults have a mobile phone which further represents an untapped opportunity for digital finance. Lack of awareness and trust are the main reasons for not making mobile or online financial transactions, the central bank said.

The BSP estimates that 51.2 million, out of a total adult population of 72 million in 2019, remain unbanked.

Lack of enough money remains the topmost reason for not having an account, followed by a perceived lack of need for an account, and lack of documentary requirements.