Basic deposit account adoption surges to 22M
MANILA -Government efforts to bring more lower-income Filipinos into the financial system are bearing fruit as the number and value of basic deposit accounts (BDAs) ballooned by 170 percent in the first three months of 2023.
According to the Bangko Sentral ng Pilipinas (BSP), BDAs increased to 21.9 million in the first quarter this year from 8.1 million in the first quarter in 2022.
In terms of deposits, BDAs accounted for P27 billion as of the end of March, which was 432 percent more than the P5.1 billion recorded at the same time last year.
Introduced in 2018, BDAs are bank accounts that have a low opening balance requirement of P100 or less, no maintaining balance, no dormancy charges and simpler identification requirements.
With these features, such accounts are intended to foster greater financial inclusion by catering to the needs of Filipinos who are not yet using the banking system, especially those in the low-income sector.
Through BDAs, more Filipinos can—through banks that do offer this product—open a savings account that earns interest and is insured by Philippine Deposit Insurance Corp.
In the first quarter this year, five more banks have begun offering BDAs to bring the total to 158 banks. The BSP said these five banks accounted for 4.3 million newly opened BDAs.
Banks that offer BDAs call it by different names other than the generic “basic deposit account.”
State-run universal bank Land Bank of the Philippines has “Landbank Piso,” which is short for Perang Inimpok Savings Option. Robinsons Bank Corp., a commercial bank, has “Simple Savings.”
BPI Direct BanKO Inc., a thrift bank, calls it “PondoKo.” Silahis Bank Inc., a rural bank in Bulacan, has “Munting Yaman.”
Makati City-based Metro South Cooperative Bank calls it “Juan Savings Deposit.” Tonik Digital Bank Inc. has the eponymous “Tonik Account.”
The BSP said in a statement that the the growth in the numbers of BDAs in the first quarter was partly driven by the conversion to BDA of transaction accounts opened under the Philippine Identification System (PhilSys) co-location strategy in the fourth quarter in 2022, which resulted in 7.5 million additional accounts.
An initiative of the Philippine Statistics Authority and Landbank, the co-location strategy is aimed at onboarding unbanked PhilSys registrants into the formal financial system after their biometrics capture at registration centers.
The BSP is leading the implementation of the National Strategy for Financial Inclusion or NSFI 2022-2028, which focuses on advancing inclusive digital finance and the financing access of micro, small, and medium enterprises or MSMEs.
The adoption of digital technologies is expected to ramp up the role of microfinance firms in bridging the financial inclusion gap in the country.