BSP: Use of electronic money growing in Philippines

Posted at 08/19/2014 1:09 PM | Updated as of 08/19/2014 1:09 PM

MANILA, Philippines - More Filipinos are getting access to financial services in the country, according to a report by the Bangko Sentral ng Pilipinas.

In its 2013 Report on the State of Financial Inclusion in the Philippines, the BSP said the banking system has become more inclusive over the last few years.

The BSP cited the expansion of bank networks and ATM networks in the country, with year-on-year growth of 4 percent and 15 percent, respectively.

Also cited was the increase in the use of formal financial products and services, as seen with the growth of bank deposits and loans.

The report showed deposit accounts in banks increased by 9 percent in 2013, while loan portfolio jumped 27 percent to P4.25 trilion in 2013.

The BSP said there has been noteworthy gains in bringing financial services to areas which were previously banked or unserved, such as the establishment of micro-banking offices (MBOs) or other banking offices. These offices are scaled-down banking offices targeted to poor and low-income clients, especially those in the countryside.

The number of operating MBOs jumped 26 percent to 465 in 2013, from 370 in 2012. The BSP said there are 56 cities and municipalities served by MBOs in 2013, 12 percent higher than the previous year.

The BSP also noted a significant gain in the use of electronic money.

E-money defined by the BSP as a monetary value electronically stored in convenient payment instruments that consumers can use to buy or pay for goods and services, to transfer or remit funds or to withdraw funds. This includes cash cards, e-wallets and stored value cards.

"The use of electronic money has likewise been significant. This signifies the greater access to transactional accounts which can be considered a first step toward financial inclusion," the BSP said.

In 2013, registered e-money accounts jumped 34 percent to 26.7 million, from 2010 levels.

E-money transactions, which include bills payments and person-to-person payments, also surged to 217 million in 2013 from 138 million in 2010.

The BSP said microfinance also continued to grow, with loan portfolio growing 3 percent to P8.7 billion in 2013, from P8.4 billion in 2012.

"The report shows that the BSP's efforts in expanding access have contributed to an increased usage of financial products and services. Yet there is still work to be done. Work is underway for a national baseline survey that will measure financial inclusion from the demand side and provide first-hand information on the quality (consumer experience) and welfare (consumer impact) dimensions of financial inclusion," the central bank said.