A new scheme order from the Bangko Sentral ng Pilipinas (BSP) or the Central Bank of the Philippines will enable unbanked Filipinos to open their own bank accounts with fewer requirements and following an easier enrolment process. Last January, BSP approved the new framework that offers basic deposit accounts to Filipinos who cannot afford the maintaining balance that most banks require.
The basic account will have the following key features: an opening amount of less than PhP100, simplified know-your-customer (KYC) requirements, no dormancy charges (i.e., fees charged when the account is not used for a period of time), and no minimum maintaining balance. These features will cater to the needs of unbanked Filipinos who do not have standard identification documents or valid IDs. The account will also be no-frills deposit and low-cost.
The maximum balance is set to PhP50,000 to prevent misuse of the account. A preferential 0% reserve requirement is granted for basic deposit accounts as incentive for banks, which can lower the account maintenance cost.
The reserve requirement refers to the specific percentage of the time deposits and demand deposits of banks. Its main purpose is to regulate the growth of money supply; having a low reserve requirement enables more money in the banking system. According to BSP, the 0% preferential reserve requirement is not applicable to regular bank accounts, even those with balances below PhP50,000.
BSP’s new scheme was put into place to encourage people without formal bank accounts, particularly those from low-income brackets, to open one; therefore diminishing the number of Filipinos without bank accounts. According to BSP’s data, only 31.3% of Filipino adults have formal bank accounts within financial institutions. 81% or eight out of ten families have only one account within their household and 15% have two accounts.
The average deposit made by 28.4% of Filipinos starts from a thousand up to PhP5,000—the typical maintaining balance in some local banks. This is closely followed by 19.4% of Filipinos who have less than a thousand pesos in their account.
Based on a research by the Philippine Statistics Authority, this 28.4% statistic represents 1.6 million out of 24 million households in the country as of 2017. However, only about 14% of these households can maintain their bank account according to a previous 2014 BSP survey.
A huge majority of Filipinos said that the primary reason for a lack of account is insufficient funds. Unfortunately, due to the fact that majority of Filipino workers are earning below or at minimum wage, it is hard for them to supply the needed maintaining balance. It doesn’t help that some banks charge fees if the balance hits below the minimum. Lack of documentary requirements is another barrier when it comes to opening bank accounts.
As an alternative for not having accounts, some Filipinos opt to stash money inside their homes, but BSP regards this practice as “unsafe.” Not having a bank account can be a disadvantage as having one enables safer, secure, convenient, and affordable monetary transactions. Owning an account also entails additional benefits such as insurance, investments, and credit.
Prior to this scheme, several local banks have already been offering a similar feature. For instance, Bank of the Philippine Islands
has an Easy Saver account feature which lets the user open an account with only an initial deposit of PhP200 and no subsequent maintaining balance.
’s basic savings account is also among the most affordable savings account with only a PhP100 initial deposit and a PhP100 maintaining balance. Equicom Savings Bank
’s ATM savings account also has a PhP100 initial deposit and maintaining fee.
Before the new scheme was put in place, usual requirements for opening a basic bank account include two valid IDs such as driver’s license, police clearance, NBI clearance, PhilHealth card, senior citizen card, postal ID, PRC, passport, Voters ID, and others. The IDs should be the original copy, unexpired, issued by official authority, and photo-bearing. Utility bills (water, electricity, internet, credit card bills, and others) are also part of the requirements.
Based on BSP’s statement, the basic deposit account scheme supports the application of the National Retail Payments System (NRPS), which aims to improve the digital payments organization in the country. The NRPS targets a uniform transactional account for all establishments. Those who are previously unbanked will get to be a part of the digital finance ecosystem and will benefit from electronic fund transfers for their remittance and payments needs.