BSP urges banks to offer more financial products for children

MANILA, Philippines - The Bangko Sentral ng Pilipinas is urging banks in the country to offer more financial  products for children.

BSP Governor Amando M. Tetangco Jr. said these financial products will help develop  a  financially literate population in the future.

“We are encouraging more banks to support this program. A more financially literate population, including the youth, is really good for the economy and the financial system as a whole,’’ Tetangco said.

For his part, Philippine Deposit Insurance Corp. president Valentin Araneta said that having more children with savings deposit account is a “preparation for a wider mass base’’ that should give banks more resources to finance lending. 

BSP estimates only 31,000 Filipino children have their own savings account. These accounts were garnered since January this year when the BSP partnered with the Department of Education (DepEd) and 12 local banks under the Bank Marketing Association of the Philippines to promote the value of savings among Filipino children.

Aside from that, integrated courses on savings and money management have also been implemented in a number of public schools, Tetangco said.

Banks generally use deposit money on their lending activities. More lending, in turn, translates to higher consumption and investment that promote economic growth.

Bank industry data showed the estimated loan-to-deposit ratio at around 60 percent last year. 

A higher loan-to-deposit ratio indicates more credit is being extended to borrowers who are expected to spur economic activity.

The Children and Youth Finance International (CYFI) is targeting 100 million children in 100 countries including the Philippines to have their own savings account by 2015. At present, only 18.738 milllion children around the world have their own savings account.

‘’We are working with the BSP and the DepEd to create a national strategy on how to take this forward. I think it will take two to three years to decide on the strategy,’’said Jeroo Billimonia, managing director of the CYFI.

The strategy, she said, will focus on tying up with government agencies, non-government organizations as well as banks to encourage children aged 18 years and below to save for their future.

CFYI  recently held a forum on financial education for children in Manila.