By Lee C. Chipongian
The central bank yesterday said 86 percent of Filipino households are unbanked or do not have a deposit account because they do not have enough cash to spare for keeping.
The Bangko Sentral ng Pilipinas’ (BSP) quadrennial Consumer Finance Survey (CFS) noted that of the 14 percent of households that have deposit accounts, the members that are banked are mostly employees, either by private companies or by the government.
Majority who are unbanked are self-employed, or working for a private household, other household’s farm, or in other informal occupations.
“The foremost reason cited by households for not having a deposit account was not having enough money to keep an account,” said the BSP. The other reasons are: They do not need a bank/cash account; the bank/institution location is far; cannot manage an account; service charges are too high; and minimum balance is too high.
Some of those surveyed said they “do not like to deal with banks/institutions and do not trust banks/institutions.”
Of the small number who have bank accounts, the BSP said commercial banks are a popular choice. Eight in 10 deposit accounts are kept in these banks or 50.2 percent in commercial banks, 13.8 percent in rural/cooperative banks, 10.1 percent in savings/thrift banks and nine percent in microfinance banks. Overall, the formal banks accounted for 83.1 percent of all deposit accounts of households, while 11.4 percent, 4.1 percent and 3.6 percent are in multipurpose/credit cooperative, paluwagan and savings and loan association.
Seven in 10 households had interest-paying deposit accounts. “This indicated that 30 percent of the households still prefer to maintain deposit accounts even if their average daily balance falls below the required amount to earn interest or had earned a negligible amount of interest,” said the BSP.
The CFS – The first was in 2009 and the latest in 2014 – culled data on the financial conditions of households, their borrowings, income and spending. The 2014 CFS surveyed 18,000 households across all the regions.
The survey also indicated that in majority of Filipino households, home appliances, own residence and motor vehicles are the most common types of assets owned. Other types of assets were motor vehicles, retirement insurance, deposit accounts and other real property apart from their residence such as land, house and lot, and farm and precious objects. A very small percentage of households owned securities and investment products such as stocks, bonds, mutual funds and unit investment trust funds, according to the BSP.
Household liabilities are in the form of consumer and real property loans, the report added. About two percent of households have credit cards.
“Aside from housing and real estate, motor vehicle, and credit card loans, 15.2 percent of households availed themselves of loans such as personal, salary, multipurpose, and business loans,” said the BSP.
“These were used primarily for business start-ups and expansion, educational expenses, debt payments, medical, and house improvement expenses.”
The BSP said the current CFS showed a significant increase in the country’s labor force in 10 years and reconfirmed the young population. The average age of household members are 5 to 14 years old (21.5 percent) and 15-24 years old (20.2 percent).
“These figures indicated that a significant increase in the country’s labor force could be expected considering that a much bigger number of young people will enter the labor force every year compared to the number of older people who leave the labor force working age group,” said the BSP.