OVER three million new accounts were opened between 2011 and 2014, the Bangko Sentral ng Pilipinas (BSP) said.
It based the estimate on the latest edition of the World Bank Global Findex, which reveals that 31.3 percent of Filipino adults own a formal account, up by 4.7 percentage points from the baseline figure of 26.6 percent reported in the 2011 Findex.
A formal account refers to an account held in financial institutions such as banks, cooperatives or microfinance institutions and can be a mobile money account as well. Such an account can be used to save money and send or receive payments and remittances.
“Worth noting from the 2014 Findex is that there is growth in account penetration across income class, gender, age and educational attainment,” the BSP said in a statement.
The percentage of the poorest 40 percent of Filipino adults who own a formal account increased by 7.1 percentage points to 17.8 percent in 2014 from 10.7 percent in 2011.
Account ownership in the richest 60 percent rose only by 3.4 percentage points to 40.6 percent in 2014. The increase in account ownership is slightly higher for men, although the percentage with accounts is still higher for women (37.9 percent) than men (24.4 percent).
In terms of age, account penetration is higher for older adults (those aged 25 years old and above) at 35.9 percent compared to 19 percent among younger adults.
While account ownership is higher for adults with at least secondary education (36.8 percent) than those with at most primary education (18.1 percent), it is interesting to note that growth is higher for less educated adults, the BSP added.
“These gains are a result of continuing efforts in bringing the financial system closer to the people, especially to the disadvantaged segments. The BSP defines financial inclusion as a state wherein there is effective access to a wide range of financial services for all Filipinos,” the statement said.
Aside from account ownership, the 2014 Findex also provides insights on the usage of other financial products.
Informal borrowing still common
For loans, informal borrowing is still the most common practice in the country. The percentage of those who borrowed from family and friends increased to 48.7 percent in 2014 from 39 percent in 2011. The Philippines is also one of the countries in the world where more than 10 percent of adults borrow money from private informal lenders. In 2014, 13.5 percent of Filipino adults reported sourcing credit from an informal lender, up by 0.8 percentage points from 12.7 percent in 2011.
A new feature of the 2014 Findex is the inclusion of additional survey questions on payments and remittance. Results show that only 4.2 percent of Filipino adults have a mobile money account while 3.5 percent used the Internet to pay bills or make purchases. For domestic remittance, use of money transfer operators (MTOs) is more prevalent than sending or receiving remittances via banks or mobile phone.
Around 71 percent of Filipino adults who reported sending remittance and 58 percent of those who received remittance said that they used MTOs. BSP data show that there are more MTOs than banks in the country: in 2014, there were 10,315 banking offices as opposed to 15,443 MTOs, comprising 6,621 pawnshops with remittance business and 8,822 remittance agents and money changers offering remittance services.
In comparison with other Southeast Asian countries, the level of financial inclusion in the Philippines—as measured by the percentage of adults with formal accounts—is lower than Malaysia (81 percent), Thailand (78 percent) and Indonesia (36 percent) but higher than Vietnam (31 percent), Myanmar (23 percent) and Cambodia (22 percent).
Globally, the percentage of account holders is 62 percent, with variations among high-income (91 percent), middle-income (58 percent) and low-income (28 percent) countries.
The Global Findex is considered as the world’s most comprehensive database on financial inclusion. The indicators are drawn from survey data and based on interviews with more than 150,000 nationally representative and randomly selected adults in 143 countries, representing more than 97 percent of the world’s adult population. (PR)