THE number of Filipino adults who hold bank accounts rose slightly by 4.7 percentage points in 2014 from 2011, but even with the increase, only about one in three Filipinos have a bank account, according to a World Bank study on financial inclusion .
The World Bank’s Global Findex Database for 2014, released just this month, revealed that 31.3 percent of Filipino adults own a formal account, up from the baseline figure of 26.6 percent reported in the 2011 Findex.
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 account can be used to save money and send or receive payments and remittance.
The 2014 Findex also showed that there has been growth in account penetration across income class, gender, age and educational attainment.
It said that 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.
Account ownership is higher for adults with at least secondary education (36.8 percent) than those with at most primary education (18.1 percent).
3M new accounts
For its part, the Bangko Sentral ng Pilipinas (BSP) estimates that over 3 million new accounts were opened between 2011 and 2014.
“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 central bank said.
Aside from account ownership, the 2014 Findex also provides insights on the usage of other financial products.
For loans, informal borrowing is still the most common practice in the country, it said.
According to the report, the percentage of those who borrowed from family and friends in the past 12 months increased to 48.7 percent in 2014 from 39 percent in 2011.
It also stressed that the Philippines is 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.
The Findex study also showed 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, it said.
Around 71 percent of Filipino adults who reported sending remittance and 58 percent of those who received remittance said that they used MTOs.
The 2014 Findex said MTOs have more counters than banks have branches in the Philippines, and the domestic remittances business was built on an existing infrastructure of these operators set up to receive international remittances.
Data from the BSP supported this view as it showed that there are more MTOs than banks in the country.
In 2014, there were 10,315 banking offices as opposed to 15,443 MTOs comprised of 6,621 pawnshops with remittance business and 8,822 remittance agents and money changers offering remittance services.
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.
“The results of the 2014 Global Findex will be enriched by the BSP’s first-ever nationwide survey on financial inclusion which will be released soon. Said survey has a more in-depth look at the state of financial inclusion in the country to complement the high-level cross country indicators of Global Findex,” the central bank said.