Drawing more Filipinos into banking system

Bangko Sentral ng Pilipinas. (File photo / Philippine Daily Inquirer)

The rollout of the national ID system will draw more Filipinos into the formal financial system and help boost economic activity as citizens will now be able to open bank accounts with just one identification card.

Thus said the head of the Bangko Sentral ng Pilipinas (BSP) who expressed his support for the Philippine Identification System (PhilSys), which has started its mass registration phase.

In particular, BSP Governor Benjamin Diokno noted a recent report by state-run Land Bank of the Philippines, which said that 2.4 million “unbanked” PhilSys registration had signed up for its transaction accounts as of April 30, 2021.

“The PhilSys will be a strategic enabler for a more inclusive new economy, bringing us closer to our shared vision of prosperity for all,” he said.

Under this scheme, the Philippine identification card will be honored as official proof of identity for transactions with government and private entities.

The BSP reminded banks of the provisions in Republic Act No. 1105, or the Philippine Identification System Act, that the PhilID card, by itself, was a sufficient proof of identification honored and accepted in bank transactions without the need to present any other documentary requirements.

The results of the BSP’s 2019 Financial Inclusion Survey cited documentary requirements as one of the top challenges in opening a bank account.

With the national ID system, unbanked Filipinos will be empowered to open bank accounts, including basic deposit accounts.

Basic deposit accounts were introduced by the BSP in 2018 as a response to the need of the low-income sector for a low-cost, easy-to-open account. With an initial deposit of P100, without minimum maintaining balance and dormancy charges, and involving minimal identification requirement, account ownership has increased and allowed more Filipinos to become financially included.

Based on data from the fourth quarter of 2020, there were 133 banks in the country offering basic deposit accounts. The total number of depositors for these accounts have reached 6.6 million with an aggregate deposit amount of P4.7 billion.