98% of retail transactions in PH done in cash


Virtually all retail financial transactions in the country are being done using cash, creating inefficiencies and leakages in the country’s economy, initial findings of a new study being cited by the central bank has shown.

Deputy Governor Nestor Espenilla Jr. of the Bangko Sentral ng Pilipinas (BSP) disclosed Wednesday that a recent survey showed that 98 percent of all retail transactions in the country, whether among individuals or among businesses, were done in cash.

“Imagine the lack of transparency that it generates in the economy,” Espenilla said, citing initial findings of an unreleased study by the Better Than Cash Alliance.

He said the study, which was presented to BSP officials recently, showed the country lagged far behind countries like South Korea, where as much as 60 percent of all transactions are “digitized” or done using credit cards, debit cards and other electronic platforms.

The Better Than Cash Alliance is a privately funded organization that promotes the increased use of electronic payment platforms like credit cards and mobile phone wallets around the world.

The group was formed in 2002 and was funded initially by the Bill and Melinda Gates Foundation, the US Agency for International Development (USAID) and multinational firms Visa Inc., Citigroup and Ford.

The prevailing preference for cash over electronic payments in the Philippines comes despite the country’s reputation as one of the world’s leaders in the creation of innovative applications for the use of electronic platforms.

Espenilla said the use of cash was often a source of leakage, which created problems particularly for tax authorities.

Handling money was also significantly more expensive than processing electronic payments, he said. “From producing it, moving it, guarding it and even destroying it, with cash, it’s all cost,” Espenilla said. “Digitized money is also [easier to track]. Not only is it more efficient, it’s also more transparent… because everything is recorded,” he explained.

For instance, the billions of pesos in doleout under the Aquino administration’s Conditional Cash Transfer (CCT) program were disbursed using mobile phone wallets with the help of the country’s top telecommunication companies.

Last Thursday, dominant carrier Smart Communications and the LandBank of the Philippines launched a new service that would allow CCT beneficiaries to automatically save part of the money they get from the government. Half of this money can then be borrowed and used as capital for the sale of prepaid mobile phone load credits.

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  • robin

    Singapore right now is using cashless payment from bus to grocery… This can be ATM (NETS), Credit Card, at meron din tinatawag na ez link that normally use for bus/mrt/lrt/taxi, convenient store and even paying their bills

    Its safe and convenient there isn’t any charge if you pay by this cards I think if we make it standards in everything. Its safe and secured compare sa mag dadala ka nang cash for example sa pinas ma hold-up ka you can just give it to them and just call the bank or issuing entity to blocked it.

    • slicenziuten

      if you like it so much there, then go and live in singapore dude.

      • robin

        I already did lol.. i been working here for like 7 years “dude”.. now im seeking PR for canada

  • Bayang_magiliw

    On the negative side, NAPOLES (National Association of Pdaf Organizers and Loot Encashment Services) transactions are always in CASH!!!

  • libraocto

    The question is….. is it safe using the Credit cards?????!!!!!!????? My son lost money in the bank… he is using an ATM card… At isa pa pag gumamit ka ng Credit cards, merong bawas na charge fee. I remember one American friend once told me that USA live by Credit… American economy revolves into credit… Ano ang gusto in cash or by credit???? syempre pag cash walang interes ang bayad.. pag credit mayroong interes…. paano kung wala nang pambayad????

    • robin

      actually how safe will you feel having money in your pocket compare sa atm/credit card – cards you can just blocked it when someone stole it from you immediately it will be blocked.. compare sa money when mas tas-tassan ka while at jeepney wala na… or worst ma hold up,,,’

      for me also im using credit card to managed my expenses its more convenient specially if im in overseas related to my work from time to time.

      not sure sa pinas but if you actually issue supplementary card (not sure if its correct term) for your son here from your card you can limit magkano ang credit limit nya but that means it will be taken off from your credit limit din

    • AntiAko

      I’ve been using credit cards for the past few years and I have never encountered security problems. The only problem I have in using credit cards in pinas is the refusal of many businesses to even accept credit cards so I have to use cash instead. Now I’m in the USA and in here I don’t have to carry cash with me since almost all businesses accept credit cards and some don’t even accept cash anymore! Online payments and online shopping are so convenient and hassle-free. Imagine no traveling and no lines!

      As for interest rates? I’ve never paid any since I pay all my credit card bills the next month.

  • eight_log

    This is another scamming scheme …. save a part of your CCT fund and borrow a part of it …. !!!!! WOW what an INCLUSIVE GROWTH BY SCAMMING FROM THE POOR … TALAGANG GIGISAHIN SILA SA SARILING MANTIKA!!!!

  • SirJuanTamad

    Electronic payment system can give more liquidity to our banking system but the question is who owns these big banks? Sy? Tan? Ty? Ang? Cojuangco? Ayala?. C’mon!

  • altair22

    Ang problema ay ang credit system mismo. Hindi encouraging ang gumamit ng credit card kung kelangan mo pang pumunta sa banko o di kaya sa SM para magbayad ng credit card or utility bills. Sa Korea kasi, allowed ang mga credit card companies na mag withdraw sa bank account ng debtor. It’s hassle free. Kung ganyan sana sa Pilipinas e di mas madami ang gagamit ng credit card. So simple and yet nobody in the government thought of it. Kelangan pa bang turuan sila?

    • Mux

      Of course we can do that here. We can link our Bank Accounts to our credit cards so it’s an auto debit. It has to be the same bank issuing the credit card and where the account is. Are you saying that in Korea you can link credit cards even to withdraw even from another bank?

    • AntiAko

      I don’t go to my bank to pay my credit card bills. I enroll all my accounts online and I just log on to check my bills and make payments from any of my enrolled accounts. It is so easy and convenient. I’ve been in the USA for a year now and I’ve been using my philippine credit card and have not had any problem in paying my bills. Thanks to BPIs very good system.

      As for withdrawing money from your credit card? Are you referring to cash advances? I think all banks accept that as long as your credit card is part of a group that the atm owner is part of too like Cirrus, etc. Credit cards are underwritten by Visa or Mastercard and not by the banks that issue them.

  • Mario_Garcia

    Maybe we should try the Octopus Card system being used in Hongkong.

  • Mario_Garcia

    Force the people to use debit card and charge them a service fee for falling below the minimum balance, that is what the Better than Cash Alliance wants to see.

    • Lunchb0x78

      Actually that is a banking issue that your government needs to address. I have never seen a country before that requires you to maintain a minimum balance. Total insanity.

      • Mario_Garcia

        Don’t fall for the electronic thing, only the capitalist will gain from it.

      • Lunchb0x78

        Its not true. Proper banking systems in your country will encourage investment which is good for everyone. It will also go a long way to curbing corruption which hurts the poor and disadvantaged more than anyone else.

      • Mario_Garcia

        The problem with us here is that we don’t have banks we got only pawnshops disguised as banks. Banks are owned by big industrialists and realty companies which source funds mainly for their own needs.
        Eventually, if we get too ingrained in their system they will charge us a service fee for watching over our money in their vaults.

      • nel

        Absolute lie. Most banks in the US require a minimum balance.

      • Lunchb0x78

        I didn’t lie. I have never been to the US nor do I intend too. I deal with and in many countries and your banking system neefs some heavy regulations enforced by your government.

  • Pork lover boy

    Ikaw gagamit ka ba ng credit or debit card kung ang kaya mong bilhin ay isang tinging toyo, asin, patis at suka? Kaya 98% kasi karamihan sa mga botante ko ay mahihirap. May debit ka nga pero sa suweldo palang ay ubos na. Wala silang credit card dahil mababa income. It is just a simple math with no corruption involved. hehehe

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