Updated 16:01 PM PHT Fri, April 17, 2015
(CNN Philippines) — In 2014, about 69% of Filipinos did not have bank accounts of their own or maintained one with someone else, according to a study by the World Bank.
Likewise, neither did this group hold accounts in other formal financial institutions. The figure is far higher than the global average of 38%, the developing economy median of 46%, and the East Asia and Pacific average of 31%.
The World Bank's Global Findex Database for 2014, which measures financial inclusion around the world, reports that only about three out of 10 Filipino adults possess bank accounts. Women comprise only 38% of that group.
The situation is far worse among the poorest 40% of Filipino households: Only about two out of every 10 adults in that group have their own bank accounts.
It was also found that the Philippines is one of a few countries around the world where more than 10% of adults seek loans from private informal lenders. The world average stands at only 5%.
Likewise, the study reported that money-transfer operators were the main avenues of remittances in the country instead of banks. It's a statistic that the Philippines shares with Colombia: "About three-quarters of adults who reported sending or receiving remittances said that they used this method."
"Money transfer operators have more counters than banks have branches in both countries, and the domestic remittances business was built on an existing infrastructure of these operators set up to receive international remittances," the study says.
Account ownership has been identified by the bank as a crucial part of financial inclusion.
"Studies show that when people participate in the financial system, they are better able to start and expand businesses, invest in education, manage risk, and absorb financial shocks," the report said.
"For most people, owning an account provides an entry point into the formal financial system. An account makes it easier and often more affordable to pay bills, to receive payments, and to send or receive remittances. It also offers a safe place to store money and so can encourage saving. And it can open access to credit from a financial institution. In short, having an account is a marker of financial inclusion."
The report notes that a lack of enough money is the most common reason why individuals around the world don't own formal financial accounts — about 59% of them identified it as a reason, while 16% said that it was the only reason.
"The challenge in each case is for the private sector to design appropriate financial products that meet the needs of the unbanked and make using an account at least as easy, convenient, and affordable as the alternatives."