Finance services still elude most Filipinos—survey

THE PHILIPPINES needs to implement more measures to improve accessibility of financial services to levels at par with those of neighboring countries, according to a survey conducted by the World Bank and the Consultative Group to Assist the Poor (CGAP).

In a report entitled “Financial Access 2010: The State of Financial Inclusion Through the Crisis,” the World Bank and CGAP said that the number of bank accounts per 1,000 adults in the Philippines stood at 499 last year.

This is lower than the 505 reported in Indonesia, 2,236 in Singapore, 2,063 in Malaysia, 5,187 in Taiwan, and 7,172 in Japan.

In Cambodia, only 95.83 per 1,000 adults have bank accounts.

The report further showed that the number of automated teller machines in the Philippines per 100,000 adults stood at 14 last year. It was the same as in Indonesia, but lower than that of Malaysia with 54, Singapore with 50, Thailand with 71, and Taiwan with 133.

Cambodia has 4 ATMs per 100,000 adults.

In terms of accessibility of bank branches, there were 12 branches per 100,000 adults in the Philippines, higher than Indonesia’s 8, Malaysia’s and Singapore’s 11, and Cambodia’s 3.92. Japan roughly has the same ratio as the Philippines.

But Thailand and Taiwan had more bank branches per 100,000 adults at 14 and 18, respectively.

Although access to financial services continued to be a problem in the Philippines, the implementation last year of key reforms in regulation marked an improvement, the report acknowledged.

It cited some of the reforms, which touched on consumer protection, enhancement of capability of financial institutions, facilitating access of small and medium enterprises (SMEs) to financing, and enabling microfinance.

Regulators will continue to improve SMEs’ access to credit, noting that these entities are drivers of the domestic economy, the Bangko Sentral ng Pilipinas said.

The central bank specifically will focus on the creation of credit surety funds (CSFs) for SMEs and microbusinesses in rural areas.

CSFs are pooled resources contributed by local governments, state-owned firms, and private cooperatives. The funds are used to guarantee credit being secured by SMEs and microenterprises.

Regulators said guaranteeing loan applications of SMEs and microenterprises would help increase their chances of securing bank loans.

The report highlighted the need for improved access to financing, noting that economic development would largely depend on this.

The report said that, on the average, access to financial services worldwide improved last year despite the financial downturn.

“The use of these services is inelastic with respect to macroeconomic conditions. This finding underscores the need to promote access to basic payments and savings services as essential tools in an increasingly digitized world,” the report said. –Michelle Remo, Philippine Daily Inquirer