FEW days ago, I had an opportunity to chitchat with RBAP Executive Director Raffy Amparo over a cup of coffee in his office at Intramuros, Manila.
Approximately 21 percent of RBAP’s members have achieved 50% digitalization meaning there are 79 Rural Banks offering banking services through Mobile Apps, Automated Teller Machines and Online Payments compared to 19 Rural Banks that had such capabilities in 2019, Amparo said.
“There is so much room for more,” Amparo, who retired in 2018 and joined rural banking industry in 2019, said.
Based on the 2021 BSP Financial Inclusion Survey, the number of unbanked Filipino adults in 2021 dropped from 51.2 million in 2019 to 34.3 million.
Almost 17 million Filipinos obtained their bank accounts at the Land Bank of the Philippines during the height of the pandemic where the Philippine Government had distributed P200 billion financial assistance to the marginalized families who were entitled to P5,000 to P8,000 a month for two months.
Of the 34.3 million unbanked Filipinos, as per data provided by BSP Financial Inclusion Survey, it showed the common sentiments, namely:
1. Opted not to open a bank account because they do not have enough money to go to the bank, minimum money to open a bank account and maintain such a bank account.
2. Do not have documentary requirements as part of the customer due diligence.
3. Zero knowledge about the importance of having a bank account.
In addition, there are 475 unbanked cities and municipalities across the Philippines as of September 30, 2023 based on the data mined by Supervisory Insights Division under BSP’s Department of Supervisory Analytics and generated on December 21, 2023.
The Asian Development Bank, according to Amparo, has approved grants to nine Rural Banks for digitalization.
Around P36.7 million were awarded by ADB for Banco San Vicente, MVSM Bank, Rural Bank of Guinobatan, Rural Bank of Medina, Rural Bank of Montalban, Rural Bank of Porac, Rural Bank of Silay and Rural Bank of Tandag to put up cloud-based core banking, loan origination system and credit scoring systems to boost operational efficiency, reduce expenses, expand their reach and improve customer experiences.
Amparo said the RBAP is petitioning the ABD to re-open the program so that more Rural Banks can embark on their own digitalization journeys.
So why digitalize the rural banks?
Amparo said rural banks with more than 3,000 branches across the Philippines are strategically positioned to be a catalyst for a more dynamic financial inclusion.
By digitizing rural banks in the Philippines, it will create numerous new access points for financial services and help the country achieve its targeted economic growth, Amparo said.
At least 23.5 percent of the Philippines population or known as the Millennials (aged 15 to 24) are comfortable in using digital money and demanding the Rural Banks to offer banking services online to address the growing demand of the new breed banking clients and reach out to the unbanked including farmers, fisherfolks and other people in the rural communities to achieve inclusive economic growth.
Editor’s Note: The author was a former Press Attaché of the Philippine Embassy to Canberra, Australia (1998-2001).
Jun Burgos worked as strategic communications officer of former Senate President Edgardo Angara (2001-2002) and consultant for strategic and tactical communications of Senator Jinggoy Ejercito Estrada (2004-2010).
He was recently a Public Information Officer of the Pasay City Government (2019-2021).
Jun Burgos has extensive experience in software development such as the country’s 1st Digital Customer Due Diligence and Records Keeping (electronic KYC) approved by AMLC and concurred by BSP AMLSG last 2017.
He was also a co-author of copyrighted homegrown Anti-Money Laundering software known as eComply that was demonstrated to AMLC and BSP-ISD 1.
Note: The author was a former Press Attaché of the Philippine Embassy to Canberra, Australia (1998-2001). He worked as strategic communications consultant of former Senate President Edgardo Angara (2001-2002) and Senator Jinggoy Ejercito Estrada (2004-2010). He was recently a Public Information Officer of the Pasay City Government (2019-2021). The author has extensive experience in software development such as the country’s 1st Digital Customer Due Diligence and Records Keeping (electronic KYC) approved by AMLC and concurred by BSP AMLSG last 2017. He was also a co-author of copyrighted homegrown Anti-Money Laundering software known as eComply that was demonstrated to AMLC and BSP-ISD 1.