65% of Pinoy households now have bank accounts

MANILA, Philippines — The number of Filipino households with formal bank accounts further increased to 65 percent last year after almost doubling to 56 percent in 2021 from 29 percent in 2019.

BSP Governor Eli Remolona Jr. said in a speech during the Second Digital Financial Inclusion Award (DFIA) funded by Citi Foundation that this in line with the objective to onboard 70 percent of Filipino adults to the formal financial system before the end of 2023 under the Digital Payments Transformation Roadmap.

“Yes, we are gaining ground, but there is still so much more that we can do,” Remolona said.

Likewise, the BSP aims to increase the share of digital payments to total retail transactions to 50 percent by this year.

With the COVID-19 pandemic serving as catalyst, the share of digital payments to total retail transactions further increased to 42.1 percent last year after quickening to 30.3 percent in 2021 from 20.1 percent in 2020.

“Microenterprises and microfinance improve the lives of so many Filipinos, more so when they are digitalized,” Remolona said.

The BSP chief said the central bank values the DFIA  of the global banking giant as it supports and promotes both microfinance institutions and microentrepreneurs who successfully adopted digitalization to boost efficiencies and scale up customer services.

“Their initiatives are aligned with the BSP’s Digital Payments Transformation Roadmap and our National Strategy for Financial Inclusion,” he said.

For his part, Citi Philippines CEO and country head Paul Favila said digital revolution is radically transforming the finance industry and pushing the sector to adapt.

Favila said digital transformation has become a priority in finance and in the new economy, and should also be a priority for the microfinance community as they play an important role in promoting financial inclusion among micro, small and medium enterprises (MSMEs).

“To foster sustainable financial inclusion, the microfinance community will need to embrace new technologies and reconsider their business models,” Favila added

According to Favila, microfinance institutions (MFIs) have their work cut out for them to harness the potential of their legacy of experience and relationships, work with fintechs to deliver personalized, digitally-enabled services and re-educate their staff and agents to provide the human touch and assistance that their clients still seek.

When digital transformation is achieved, he explained that it offers the chance to deliver rapid, responsive and differentiated financial and social services to clients in a way that has never been done in the past.

“And in this context, MFIs have a significant advantage since they know their clients very well and the regions where they operate. With the use of new digital technology and the ability to rely on their expertise, there is a future where microfinance institution services can be both high tech and high touch,” Favila said.

Favila said the DFIA supports the government’s financial inclusion and digitalization objectives and empowers low-income individuals to become financially independent.