World Bank: 1 in 3 Filipinos has financial accounts

Over a third of Filipinos aged 15 and above owns a formal account, according to the 2017 Global Findex published by the World Bank, the latest edition of the world’s most comprehensive database on financial inclusion. (Photo by Glendale Lapastora (1)/Flickr, CC BY-SA 2.0)

MANILA — Over a third of Filipinos aged 15 and above owns a formal account, according to the 2017 Global Findex published by the World Bank, the latest edition of the world’s most comprehensive database on financial inclusion.

Data showed that 34.5 percent of Filipino adults have a formal account that can be used to save money, make or receive payments, and receive wages or financial help.

Formal account refers to an account held in financial institutions such as banks, cooperatives, or microfinance institutions and can be an electronic money account as well.

Formal account penetration in the country improved by 3.2 percentage points from 31.3 percent in 2014, translating to more than 3.7 million Filipino adults who opened an account in the past three years.

While gains are modest, the Philippines made remarkable strides in indicators pertaining to digital payments.

The share of adults who used the internet to pay bills or buy something online grew by 6.3 percentage points to 9.9 percent in 2017, while those who made or received digital payments in the past year rose by 5.6 percentage points to 25.1 percent in 2017.

The prospects look bright as the Philippines takes deliberate measures towards digitization.

The Bangko Sentral ng Pilipinas continues to champion the National Retail Payment System (NRPS), its flagship program for digital finance. This is supported by other government payments and implementation of the Philippine E-Commerce Roadmap.

The government is also setting the foundation of a digital ecosystem through the legislative measures such as the biometric national ID bill and Payment Systems Act.

The 2017 Global Findex also highlighted key challenges to disadvantaged segments such as farmers and small businesses.

Those who borrowed start, operate, or expand a farm or business declined to 4.2 percent in 2017 from 13.6 percent in 2014. One in five adults received payments for the sale of agricultural goods, slightly unchanged from 2014 to 2017.

Aligned with this finding, the BSP is focusing its financial inclusion work to sectors that have long been wanting for much needed financial services such as agriculture and micro, small and medium-sized enterprises.

The envisioned approach goes beyond facilitating credit provision and involves creating a financing ecosystem that supports value chains and addresses fundamental issues in the financial infrastructure in terms of guarantees, crop insurance, movable collateral registry, and credit information system, among others.

Compared with ASEAN peers, the Philippines ranked in the middle with Singapore (97.9 percent) and Cambodia (21.7 percent) at opposite ends of the spectrum.

The country’s level of account ownership fell short of the average for East Asia and the Pacific (70.6 percent) and lower middle income countries (57.8 percent).

The results of the 2017 Global Findex will be enriched by the BSP’s own financial inclusion survey, which will be released soon. The said survey has a more in depth look at the state of financial inclusion in the country to complement the topline country indicators of Global Findex.