The Bangko Sentral Ng Pilipinas (BSP) has released released the result of their Financial Inclusion Survey (FIS) of 2019 and it revealed that 71% of Filipino adults remain unbanked.
According to BSP’s survey, Filipino adults who own bank accounts grew from 23% in 2017 to 29% in 2019.
The 6 percent increase accounts for an additional 5 million Filipinos opening a bank account within the 2-year period.
The growth posted for this period is a huge jump compared to the 2015 to 2017 figure which is only 0.6 percent increase.
The BSP attributed the growth to e-money accounts which rose to 8% in 2019, from only 1% in 2017. Microfinance accounts likewise grew to 12% from 8%, while bank accounts barely moved from 11.5% in 2017.
According to the BSP, as the uptake of e-money accounts significantly grew, so did the share of account holders who use their account for payment transactions – such as fund transfers and bills payment – which more than doubled to 39% in 2019 from 18% in 2017.
Upon the further breakdown of the FIS figures, the Class E demographics grew from 14% in 2017 to 27% in 2019.
Meanwhile, the top income groups, Class ABC, Class ABC posted an account penetration of 43%.
The latest FIS survey was conducted between February to March 2020 before the implementation of the quarantine measures.
The BSP revealed that the number of Filipino adults who are unbanked is estimated at 51.2 million, out of a total adult population of 72 million in 2019.
It added that the lack of enough money remains the topmost reason for not having an account, as reported by almost half (45%) of the unbanked.
Other reasons they reported were the perceived lack of need for an account and the lack of documentary requirements.
They also noted that the perceived lack of need for an account may be linked to the lack of awareness that an account can be a tool for convenient digital payments.
This comes even as over 80% of the unbanked have various payment transactions such as receiving benefits and wages, as well as paying fees, which they do primarily in cash.
The BSP said:
“All these highlight the importance of financial and digital literacy as well as adequate consumer protection in promoting the uptake of digital financial services.”
With the accelerated adoption of the digital financial services amid the pandemic, the BSP is optimistic that better results will be seen moving forward.
It noted that the pandemic has provided significant momentum to digital finance, as more Filipinos recognize and appreciate the benefits -and necessity- of transaction accounts and digital payments.
A study made by Merchant Machine in 2021 found that the Philippines is still one of the economies that is mostly reliant on cash.
Source: BSP and Merchant Machine