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86% of Filipino households don’t have bank accounts – BSP survey

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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.

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  • Yolanda Santos

    As the author said, 86% of Filipinos do not have bank accounts because they do not have spare cash to put in the bank. Isn’t it ironic that while Philippines has 21 US dollar billionaires and hundreds of multi-millionaires, half of of our population live in poverty?

    It’s time for Idioterte to end ENDO and increase the wages of our poor workers so they can have some spare cash to put in the banks.

    • AlexanderAmproz

      They need 3 ID to open a bank account
      and don’t have the money to get 1 ID !

    • Marriane Masonia

      It’s more economical to just hide the money somewhere instead of paying stupid bank fees.

    • RPSB

      Let us not point fingers to who’s fault is it. Hence, let us know the “root cause” why this is happening. Most Pinoys doesn’t have spare cash bec they don’t know how to spend the money wisely. The problem is not how big or small your income is but it’s how you spend it. Likas sa pinoy ang “magyabang” na kahit di na kaya ng budget eh “show off” pa din. At likas din sa pinoy ang pagiging tamad at umasa sa iba. Financial Literacy should be taught to everyone. We should start from ourselves first. Spend money to only the things we need. Save the first 10-20% of income first, spend whatever is left. Knowing cash flow means knowing where to put the money. As once said by Bill Gates, “if you are born poor, it’s not your fault. But if you die poor, then it’s your fault”.

      • Yolanda Santos

        I agree with you on 90% of the points you presented. But I disagree with you that Filipinos are inherently lazy; most of them are not. I had met OFWs abroad – cruise ships, Middle East, etc, and they are smart and hardworking. Give Filipinos the education and skills and they are as good as other people in developed countries.

        On your point of “mayabang”, that is true, although not all Filipinos are like that. There are lazy Filipinos too, but there are lazy welfare bums too in other countries. Half of the Filipinos can’t save enough because many of them are jobless, and even when they are employed, their pays are so low, they are classified as working poor.

  • Tony Cowan

    This is very sad. I’m not Filipino but my wife is. Even when people have the money. They make it hard to put in the bank. She needs to keep p10.000 in at all times. Or that is what they told her. So her ATM card will work. But I admit once that happened things were easier. No more western union. Sad how all the relatives must use those kind of services. Or pawn shop. I don’t see government changing things soon unless people demand change. It saddens me to think people think if they Kill all drug dealers problems will go away. Sad indeed. In any case. This was a great article.

  • aktibota

    just filling up the form for savings is hard for the ordinary folks..getting a loan is harder wd so much requirements. depositing has to wait too long. banks just doesn’t fit for ordinary people. it’s time now to change bank policies…

  • joseph rey

    Its because we dont have much in a credit rating like in the US as a barometer of your financial Trustworthiness ,even issuing national card is hard to implement in our country, which we could probably use for a good purpose in all transaction
    Your Social Security Nos. connected to your Personal Profile .SHOULD BE YOUR PERSONAL ID

    Much to say that we do not trust the government on those kind to which banking should also have the file of your SSN as an account holder and forwarded to BIR for tax purposes..Pilipino is keen of hiding illegal wealth ,

    If we have a clean government then we could put our money in the bank

  • Roy Pacarat

    Well, I have job but still I don’t have savings until now. I just save money if I wanted to travel local or abroad. Maybe I have to change my lifestyle too. I have credit cards, maybe I need to cut off them and start saving? But what do I do, I need credit card to reserve airfare? Anyway, I started saving now, hope I can continue this.
    It’s truly that opening a bank account needs many ID’s. if you are not an employee to a medium to big size company. You can’t own a saving account.
    Maybe, it’s time for the Bangko Sentral ng Pilipinas to change the policy when it comes in bank account requirements. Maybe, it would be best if the government owned bank will open its doors to the people who wanted to have saving account. And impose minimal maintaining balance around or maybe PHP100.00 is not bad. Ang tanong na lang, would they trust us? Of course, you should.

  • jan

    install machine at convenience store to allow the poor to daily save their extra coins and small bills to make deposits credited to a plastic card account with any bank maybe attached to the convenience store promotion or with gcash/paymaya (but should not require cphone no. registration, make registration easier). this will encourage savings which they can possibly withdraw in multiples of php100.