Most Filipinos...

of account holders who have access to the Internet are ambivalent about epayments due to issues such as hacking, personal security breaches, and unsafe access,” said the BSP.

The BSP has been developing a digital finance ecosystem to ensure security, convenience and affordable rates for e-payments under its program, the National Retail Payment System.

“While formal account penetration remains low and growth is modest, there are opportunities for greater financial inclusion enabled by digital technology. At present, accounts are still underutilized for payment and remittance transactions,” noted the BSP.

Among account owners, only 18 percent are receiving salary, 12 percent are sending/receiving money, and six percent are receiving pension through their account. “Nearly nine out of 10 adults have payment transactions of which 60 percent are paying in cash. Over the counter remittance transactions are very prevalent among senders and receivers of money as 93 percent used remittance agents in sending money while 83 percent used them for receiving money in the past six months,” said the BSP. Digitizing these payment and remittance transactions is a crucial step towards digital financial inclusion, it added.

Based on FIS data, only 15.8 million of Filipino adults have bank accounts and 52.8 million are off the grid, as far as banking networks are concerned. This is the second FIS report since 2015 as baseline.

Filipinos who own account use it to save money, receive salary, send or receive remittance, and pay bills.

The BSP said banks have 11.5 percent share in account penetration while non-banks such as microfinance non-government organizations have 8.1 percent, cooperatives’ 2.9 percent, and non-stock savings and loan associations with 0.3 percent. Only 1.3 percent of adults have an electronic money or e-money account.

For the bulk of the population who do not have an account, FIS reported that 60 percent have no money to spare to park in a bank, while 21 percent said they don’t need an account. About 18 percent of surveyed lack the necessary documents to apply for an account. Other reasons cited are high cost, lack of knowledge in account opening, lack of work, and lack of awareness, said the BSP.

Last year, the central bank said Filipinos “saved more and borrowed less” and the percentage of adults with savings were up to 48 percent from 43 percent in 2015. The incidence of borrowing, in the meantime, has dropped to 22 percent from 47 percent in 2015. “The share of borrowers obtaining credit from informal sources declined significantly to 40 percent in 2017 from 72 percent in 2015,” the BSP added.

The BSP included gender data and found out that women’s financial inclusion is more “positively demonstrated” in terms of financial products and services. “While bank and e-money account penetration is slightly higher for men, women are twice likely to have an account than men in general,” noted the BSP. The gender gap favoring women is driven by institutions such as microfinance NGOs and cooperatives, it said.