Bank accounts ‘too expensive’ for low-income Filipinos
Despite significant improvement in Filipinos’ access to financial institutions during the pandemic, more lower-income Filipinos still find it costly to open and maintain bank accounts, according to the World Bank.
The Washington-based multilateral lender, in its Global Findex 2021 report released Wednesday (June 29), said that “57 percent of unbanked adults in the Philippines say that accounts are too expensive.”
“In the Philippines, 30 percent of adults (55 percent of savers) saved in only some other way, making it one of the economies with the highest share of adults doing so,” the World Bank said, referring to saving cash at home, and through assets like jewelry, livestock, real estate, as well as investment products.
The bank added that account ownership in the country “grew significantly over the past decade, but the income gap remained stagnant.”
Meanwhile globally, the pandemic helped spur the expansion in financial inclusion as it drove a large increase in digital payments.
“This expansion created new economic opportunities, narrowing the gender gap in account ownership, and building resilience at the household level to better manage financial shocks,” the World Bank said.
In the East Asia and Pacific region, ownership of accounts at banks, financial institutions, as well as mobile money providers reached 81% in 2021 from 70% in 2017.
“In Cambodia, Myanmar, the Philippines and Thailand, account ownership grew by more than 10 percentage points (ppts) since 2017,” the World Bank said.
51% of Filipino adults have bank accounts
World Bank reported that in the Philippines, 51% of adults have financial accounts, while only 34% of poorer adults have an account.
The latest figure is a significant increase compared to 31% in 2014 or just a three-percentage point increase over the three-year period.
Moreover, Filipino women were 8 percentage points or ppts less likely to have accounts.
‘Most common financial worry’
In developing countries such as the Philippines, 52% of adults were reportedly worried about medical bills in case of serious illness or accident, especially at the height of the pandemic in 2021.
“In the lower-middle income economies of Cambodia, Indonesia, and the Philippines, by contrast, nearly two in three adults (64 percent) are very worried about medical expenses,” the report read.
Since the latest Global Findex was conducted during the pandemic, respondents worried more about health and medical expenses. The responses also reflect the quality of local health care providers.
Source: Yahoo news