Philippine Daily Inquirer – The Philippines is considered one of the laggards in the Asia-Pacific region in the area of financial services reach, ranking only 12th out of 15 countries in terms of the proportion of working-age population who have accounts with banks or other financial institutions.
Results of a regional survey, done recently by various institutions including the US Agency for International Development, showed that only 26.56 percent of Filipinos aged 15 years old and above have accounts with banks or financial entities.
This proportion is better than the nearly 20 percent for Vietnam and Indonesia, and the less than 10 percent for Cambodia.
Meantime, the countries with the best financial service reach are New Zealand, Australia, and Singapore, where nearly 100 percent of working-age individuals have accounts with banks or other financial institutions.
Other countries that got the highest rankings—that is, countries where the proportion of working-age individuals with financial accounts exceed 80 percent—were Japan, South Korea and Hong Kong.
In Mongolia, Thailand, Malaysia and China, over 60 percent of working-age populations have financial accounts. Laos marginally beat the Philippines, with about 27 percent of working population having financial accounts.
According to John Owens of the USAID, who presented results of the survey Wednesday during an international forum on financial inclusion held at the Bangko Sentral ng Pilipinas, the minimal reach of financial services in the Philippines and a few other countries in the region highlights the need for enhanced technological infrastructure that can help widen the said reach.
Results of the survey were consistent with calls from the BSP for banks in the Philippines to branch out, especially to remote areas, and to continue adopting technologies that will make more people access their services even outside their regular branches.
These technologies include those that involve the use of mobile phones and the Internet for facilitation of financial services.
BSP officials admitted that expanding the reach of financial services is a critical factor for poverty reduction. Having more people from the low-income group access loans and other financial services may result in their engagement in productive activities, such as establishment of micro-enterprises.
Meantime, Wednesday’s forum also touched on the need to enhance the electronic system for government-to-person (G2P) payments. Such system is the one through which state subsidies to poor households—such as the conditional cash transfers granted by the government to selected poor households—are delivered.
Owens said an electronic payments system assures the delivery of subsidies to target beneficiaries and helps avoid corruption-related leakages.