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.