The Philippine Star

More banks needed for fund doleouts – World Bank


The government should consider tapping more banks to effectivel­y distribute its financial assistance to the poor and boost financial inclusion among Filipinos, the World Bank said.

In a working paper by social protection specialist Yasuhiro Kawasoe of the Washington-based multilater­al bank, it noted that many of the beneficiar­ies of the government’s Pantawid Pamilyang Pilipino Program (4Ps) are still having difficulti­es accessing bank services and getting their cash.

Currently, only the state-run Land Bank of the Philippine­s is being tapped for the payment for the 4Ps beneficiar­ies.

Based on World Bank’s study, over 65 percent of the 4.2 million 4Ps beneficiar­yhousehold­s live more than an hour away on foot from the closest Landbank automated teller machines and much worse for those in remote communitie­s.

Kawasoe said the potential cost and time associated with accessing cash and services could also be one of the reasons that poor households are not enrolled in 4Ps.

He said that partnering with financial service providers (FSPs) could improve financial inclusion.

“Leveraging the existing network of payment service points by collaborat­ing with FSPs other than Landbank can reduce travel time for many people,” Kawasoe said.

“As this study found, Landbank ATMs are not the closest ATMs in many barangays. Collaborat­ion with multiple banks can reduce travel time, as people go to the nearest financial transactio­n points,” he said.

The government should also consider increasing the number of electronic money issuer (EMI) agents, as a partnershi­p with them could improve people’s access to financial services, especially in remote areas.

The World Bank study showed that the limited number of financial transactio­n points is a critical bottleneck in promoting financial inclusion and digitalizi­ng government-to-person (G2P) payments.

Currently, the number of ATMs per adult population in the country at 2.9 ATMs per 10,000 is much lower than neighborin­g countries Thailand, Malaysia and Indonesia, averaging at 5.3 to 11.5 ATMs per 10,000 adults.

Further, Kawasoe said the digitaliza­tion of G2P payments to improve efficiency and transparen­cy should be accompanie­d by the availabili­ty of more and better transactio­n points that are accessible, especially to the poor, as well as existing and potential social protectiao­n beneficiar­ies.

“Although having an account is a step toward financial inclusion, people cannot use most of its functions, such as account withdrawal and deposit, if there are no financial transactio­n points near their homes,” Kawasoe said.

He also urged for the assessment of the implementa­tion of social protection programs in remote barangays.

The 4Ps provides cash grants to low-income families to ensure that children stay healthy and stay in school, reduce dropout rates, and discourage child labor.

It has been implemente­d in 41,676 barangays, benefiting more than four million families or around 20 percent of the country’s population as of last year.

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