Half-empty or half-full?

You would think that with the country experiencing better-than-expected economic growth of around 7 percent—the second best in the Asian region after China—the majority of Filipinos would be depositing part of their hard-earned money in the banking system.  

But as shown by a recent World Bank report, seven out of 10 all Filipinos remain outside the influence of the formal financial system. According to the latest edition of the World Bank Global Findex, only 31.3 percent of Filipino adults have an account in financial institutions such as banks, cooperatives or microfinance entities.

The Bangko Sentral ng Pilipinas (BSP), however, does not see the situation as half-empty, or more precisely, two-thirds empty. Its records show that  over 3 million new accounts were opened between 2011 and 2014. This means that in three years’ time, the number of account holders increased from 26.6 percent in 2011.    

Still, despite the rise in the number of bank-account holders, the Philippines falls behind other countries in Southeast Asia, ranking fifth of eight countries in the region.

In Southeast Asia, Singapore has the highest number of bank-account holders, at 96 percent, followed by Malaysia at 81 percent, Thailand at 78 percent, and Indonesia at 36 percent.

       

The Philippines tied with Vietnam at 31 percent, while Myanmar and Cambodia are the bottom two at 23 percent and 22 percent, respectively.

The BSP remains optimistic that the banking system would grow further in the coming years along with the economy as a whole since the increase in bank accounts was more evident in poorer and less educated population groups. 

After all, its records show that the poorest 40 percent of Filipino adults with bank accounts increased by 7.1 percentage points from 2011 to 2014, higher than the 3.4-percentage-point increase seen in the upper 60-percent income class of the population.

It is interesting to note, the bank regulator said, that the number of bank-account holders had increased even among less-educated adults.

It stand to reason that if the economy keeps getting better, then more people should be saving money in banks, money that can be spent elsewhere as capital to boost trade and industry. That's why the government, through the BSP, should continue efforts to bring the financial system closer to the people, especially to the disadvantaged sectors.  –END-