BSP: Micro-banking offices in municipalities up in 2014

CEBU, Philippines - The number of micro-banking offices operating in municipalities increased last year, the Bangko Sentral ng Pilipinas said.

In a data sent by the central bank's Inclusive Finance Advocacy Staff, the operating MBOs as of end of second quarter in 2014 grew 28 percent year-on-year to 501 from 391 in the same period a year ago.

According to the central bank, the rise is significant considering some of these MBOs have been serving 61 cities or municipalities that used to have no access to regular banking.

Philippine municipalities or cities with MBOs increased by 24 percent in second quarter last year to 61 from 49 in the same period in 2013.

"The number of MBOs that are less costly to put up than regular bank branches has also increased," IFAS said.

The Monetary Board recently announced it would give incentives to banks that would establish presence in unbanked areas in the country.

The central bank is waiving processing fees for the creation of branches in unbanked areas and expanding allowable activities for MBOs which are scaled-down offices that enable banks to establish presence at relatively lower cost.

"There are more than 10,000 banking offices nationwide yet 36.5 percent of the 1,634 cities and municipalities are unbanked," the BSP said.

It also said: "Banking presence tends to be skewed to higher-income and more populated areas considering the cost of setting up banking offices and operating such offices. The countryside is therefore challenged by limited financial services." (FREEMAN)