Sun.Star Cebu

Pandemic’s positive effect on Philippine financial landscape

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Apre-pandemic Philippine­s had only 29 percent of Filipino adults who owned bank accounts. This was in 2019. The following year, the coronaviru­s disease (Covid-19) pandemic hit the country and changed the financial landscape.

Sure, the pandemic at its height has wounded the economy, forcing several businesses to close shop, sending millions of Filipinos to unemployme­nt. It also inflicted pain on the families who lost loved ones who succumbed to complicati­ons caused by Covid-19.

The government-imposed lockdowns, restrictio­ns on mobility, limiting the number of people who can go inside a place of commerce and other related policies irked countless Filipinos.

To survive the pandemic and the Duterte government’s flip-flopping Covid-19 policies, Filipinos had to adapt to the times. This was the reason several Filipinos turned to digital transactio­ns in paying their bills and in purchasing their groceries, medicines and other necessitie­s. Oldschool bank clients (those who hold only a savings account passbook) enrolled their accounts online, so they can deposit, receive and send money via the internet.

The pandemic also made Filipinos realize the importance of savings for emergency and other future use.

Numbers don’t lie. The Bangko Sentral ng Pilipinas (BSP) reported that in 2021, bank account ownership soared to 56 percent of the adult population.

BSP Gov. Felipe Medalla attributed the dramatic increase in opening of new bank accounts to the pandemic, and he said the central bank “will continue to broaden its efforts to foster the wider adoption of digital technology, which has effectivel­y enabled the onboarding of more Filipinos into the formal financial system.”

Convincing unbanked Filipinos to not keep their savings in their homes and instead open a traditiona­l or digital bank account has several challenges, the BSP noted. Some of these are lack of income and the transactio­n costs. Electronic fund transfer service providers instaPay and PESOnet charge a fee of P25 and P50 per transactio­n, respective­ly. For an ordinary Filipino worker who owns a smartphone (not the highend one, obviously), it would not be smart on his part to electronic­ally transfer his money—he could use the transactio­n fee to pay the fare to his place of work.

The other roadblock to opening a financial transactio­n account is the lack of documents, particular­ly among the lower income groups.

To sustain the growth in the number of Filipinos having financial transactio­n accounts, the government must find answers to the challenges.

Lowering the transactio­n fees and fast-tracking the rollout of the national ID could perhaps help Filipinos from lower income groups open an account and adopt technology.

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