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World Bank says cost a deterrent to financial inclusion

Poor Filipinos find bank accounts ‘too expensive’ to maintain

/ 05:22 AM June 30, 2022

Many poorer Filipinos find it costly to open and maintain bank accounts, a deterrent to wider financial inclusion in the Philippines, the World Bank said.

The Washington-based multilateral lender’s Global Findex 2021 report and database released on Wednesday showed that globally, “the COVID-19 pandemic spurred financial inclusion, driving a large increase in digital payments amid the global expansion of formal financial services.”

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“This expansion created new economic opportunities, narrowing the gender gap in account ownership, and building resilience at the household level to better manage financial shocks,” the World Bank said in a statement.

In the East Asia and Pacific region, ownership of accounts at banks, financial institutions, as well as mobile money providers jumped to 81 percent last year from 70 percent in 2017.

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“In Cambodia, Myanmar, the Philippines and Thailand, account ownership grew by more than 10 percentage points (ppts) since 2017,” the World Bank said.

World Bank estimates showed that in the Philippines, 51 percent of adults have financial accounts, 47 percent of women have accounts and 34 percent of poor adults have an account in 2021.

However, there remained challenges to enjoining more Filipinos to enrol for financial accounts. For one, the World Bank said “57 percent of unbanked adults in the Philippines say that accounts are too expensive.”

“In the Philippines, 30 percent of adults (55 percent of savers) saved in only some other way, making it one of the economies with the highest share of adults doing so,” the World Bank said, referring mainly to saving cash at home, and through assets like jewelry, livestock, real estate, as well as investment products.

This was one reason why, across the globe, poorer adults were less likely to have accounts than wealthier people.

“In the Philippines and Türkiye, account ownership grew significantly over the past decade, but the income gap remained stagnant at more than 20 ppts,” the World Bank said.

Also, the World Bank said there were fewer women in the Philippines who have bank and other financial accounts. World Bank estimates showed women here were 8 ppts less likely to have accounts, which empower them, than men.

—Ben O. de Vera
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