Cash aid recipients propel bank account openings during pandemic – BSP

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(FILE PHOTO)

Metro Manila (CNN Philippines, October 21) — The long quarantine period pushed millions of Filipinos to open deposit accounts led by recipients of the government's cash aid program, the central bank said Thursday.

Rochelle Tomas, deputy director of the Bangko Sentral ng Pilipinas' Center for Learning and Inclusion Advocacy, said there were 7.3 million beneficiaries of the Social Amelioration Program who opened formal accounts as of August 3, helping push the government-wide initiative towards digital payments.

The government provided cash aid to some 18 million of the country's poorest families worth ₱5,000-₱8,000 for two months, meant to cover food and basic needs as strict lockdowns kept millions of workers unable to report to work, except for essential sectors.

For the second tranche, beneficiaries were given the option of e-wallet or bank account releases for convenience. These payouts, however, were distributed later than planned. 

The BSP official also noted during a Home Credit Philippines' Financial Literacy Forum that 4 million in new digital banking or e-wallet accounts opened since the country went under lockdowns due to the COVID-19 outbreak.

The industry saw a surge in online transactions since March, as stay-at-home rules kept people at home to limit possible infections.

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The central bank's InstaPay and PESONet platforms for interbank fund transfers got busier.

Sheila Paul, chief marketing officer at Home Credit, also noted a spike in online users, with the company's app now seeing 2.2 million active users per month.

"The pandemic has intensified the demand for online and mobile financial solutions, and we don’t see this slowing down anytime soon," Paul said.

However, Tomas noted that there remains a huge divide in attracting more Filipinos into opening their accounts and transacting online.

Only about 29% or some 20.9 million Filipino adults had their own bank accounts as of the BSP's 2019 Financial Inclusion Survey, leaving 51.2 million people out of the financial system.

Tomas said that among the unbanked, 7 out of 10 adults actually had mobile phones but are not using them to get onboard. This means that these people are either unaware or have no trust on online and mobile banking channels.

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Among cell phone owners, only 12% use the gadgets for financial transactions. Meanwhile, only 9% of adults using the internet reported that they use it for online transactions.

Tomas said the BSP, along with financial service providers, need to turn more aggressive in digital literacy and show people that going online for money transactions can be safe and convenient despite potential risks.

The central bank wants to migrate 50% of all retail payments to the digital realm and include 70% of Filipinos into the formal financial system by 2023.

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