Majority of Filipinos believe that access to financial services is important and beneficial to them, and would want to have access to such services coming from formal financial institutions, a new survey conducted by the central bank showed
“Eighty-six percent of Filipino adults believe that access to financial services is important, while 88 percent state that it is beneficial to them, according to the Nationwide Baseline Survey on Financial Inclusion (NBSFI) of the Bangko Sentral ng Pilipinas (BSP).
Private analysts see the latest survey reflecting an improvement in access to formal financial services for ordinary Filipinos.
NBSFI is the first nationally representative survey (of Filipino adults) dedicated to collecting financial inclusion data from the perspective of the actual and potential users of financial services, the BSP explained.
Data for the NBSFI was collected through face-to-face interviews using structured questionnaires. The respondents comprise a sample size of 1,200 adults, defined as individuals aged 15 years old and above. The sample came from both Metro Manila and areas outside of it (balance Luzon, Visayas and Mindanao), the BSP said.
The survey showed that 85.7 percent of the adult respondents indicated that they want to have access to financial products and services coming from formal financial institutions.
Meanwhile, 97 percent of adults believe it is important to save money and to have the means to save money. Eighty percent expressed a desire to save in formal financial institutions, it added
The survey also said that 5 out of 10 Filipino adults have experienced transacting with banks.
“In Metro Manila and ‘balance Luzon,’ more than half of the adult population have performed banking transactions, 35 percent of adults in the Visayas and 43 percent of adults in Mindanao,” it said.
In the urban areas, 55 percent of adults have conducted banking transactions compared with 45 percent in the rural areas.
4 in 10 have savings
The NBSFI noted that 4 out of 10 Filipino adults currently have savings.
About 32 percent said they used to save in the past but have stopped doing so, while the remaining 24.5 percent indicated they have never experienced saving money.
Seven out of 10 adults who have savings said they keep their savings at home.
Of the adults with savings, 32 percent put their money in banks, while others save through cooperatives, non-stock savings and loan associations, and informal savings groups.
Filipino adults said their main purpose of saving money is to draw from it in case of emergencies, while others said they save for future expenses on food and education.
Of the adults who are classified as “unbanked,” 65 percent cited the lack of enough money as the main reason for not having an account in a bank.
The other reasons cited were a lack of need for a bank account, limited knowledge and capability to manage an account, cost, distance of the bank and insufficiency of documents required by the bank.
47% borrow money
The NBSFI also revealed that majority of Filipinos have or had debt, with 47.1 percent of the adults among the respondents borrowing money, while 33.8 percent did so in the past but do not borrow anymore.
Only 19.1 percent of adults do not borrow at all, it said.
The main source of borrowing is mainly informal: 61.9 percent borrowed from family/relatives/friends and 10.1 percent from informal lenders.
The percentage of adult borrowers who go to banks for that purpose stood at 4.4 percent, lower than the percentage of adults who borrow from lending/financing companies, which was at 12 percent; cooperatives 10.5 percent; microfinance, nongovernment organizations 9.9 percent and government entities 6.1 percent.
Lastly, the Filipino adults’ main purpose for borrowing money is to buy food, or pay for school related expenses, or to finance emergencies.
Analysts from the Bank of the Philippine Islands (BPI) said the results of the latest survey from the central bank reflect an improvement in access to formal financial services for ordinary Filipinos.
“We do still have a long way to go in achieving regional financial inclusion norms. This level of literacy, which is still low, however, may be a blessing-in-disguise as this means that household debt is far from the dangerous proportions we are seeing in Hong Kong or Malaysia,” said BPI Vice President and lead economist Emilio Neri Jr.
Another BPI economist, Nicholas Antonio Mapa, said the survey shows that efforts of the BSP and banks as a whole have worked to make more Filipinos use banking services as a means to improve economic conditions in the country.
“In the past, Filipinos had access to the informal sector, the so-called black market for financing, which charged exorbitant and usurious rates. The improved numbers show the headway BSP and the banking sector have made and we need to commend them for it,” he said.
Scaling up financial services
The central bank acknowledged that the survey results reflect a need to scale up the provision of financial services in the country.
“It tells us that there, indeed, is a need to improve access for as many people as possible,” BSP Governor Amando Tetangco Jr. said.
The newly released NBSFI gives the regulators an idea of where improvements can be introduced with regard to the country’s financial system, he said.
“I think this is also an information that proves to be very important for banks, as well as to other financial service providers, as they try to give the requirements, answer the needs, and make their services as convenient and as preferred as possible by their clients,” Tetangco added.