BSP Gov. Nestor Espenilla INQUIRER file photo
The smallest banks in the Philippines can play a key role in bringing financial services — and thus, an easier path toward economic improvement — to some of the remotest parts of the country, many of which have no access to the most basic banking services.
In a speech on Monday, Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. urged rural banks to leverage their benefits of technology to bring more Filipinos into the formal financial system, especially those in far-flung areas that larger firms cannot serve.
“There is much scope for expansion towards countryside development, [as] 554 cities and municipalities, or almost a third of the total, in the country are still unbanked as of December 2017,” the central bank chief said at the annual convention of the Rural Bankers Association of the Philippines (RBAP) in Davao City.
He also pointed out that only 34.5 percent of Filipino adults have formal accounts, ranging from bank deposits to e-money accounts, according to the World Bank’s 2017 Global Findex.
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“Given RBAP’s strategic role and familiarity with rural communities, it is crucial for the industry to leverage on innovative technologies and liberalized branching rules that BSP has initiated,” he said. “This will further expand market reach and enhance existing service delivery channels in the rural areas.”
Rural banks comprise the smallest segment of the country’s banking industry, with the sector’s assets reaching only P250.7 billion at end-December 2017, representing 1.6 percent of total system-wide assets.
