The government’s efforts to promote financial inclusion among lower-income Filipinos have yielded positive results, with a 170% increase in the number and value of basic deposit accounts (BDAs) in the first three months of 2023.
According to the Bangko Sentral ng Pilipinas (BSP), the number of BDAs rose from 8.1 million in the first quarter of 2022 to 21.9 million in the same period this year. These accounts also saw a 432% increase in deposits, totaling P27 billion by the end of March, compared to P5.1 billion last year.
BDAs, which were introduced in 2018, are bank accounts that require a low opening balance of P100 or less, have no maintaining balance or dormancy charges, and have simpler identification requirements. These accounts aim to provide greater financial inclusion for Filipinos who are not yet part of the banking system, particularly those in the low-income sector.
Fostering inclusion
Through BDAs, more Filipinos can open savings accounts that earn interest and are insured by the Philippine Deposit Insurance Corp, facilitated by banks offering this product. In the first quarter of this year, five additional banks began offering BDAs, bringing the total number of participating banks to 158. These five banks accounted for 4.3 million newly opened BDAs.
While BDAs go by different names depending on the bank, they serve the same purpose. For instance, the Land Bank of the Philippines refers to its BDA as “Landbank Piso,” while Robinsons Bank Corp. offers “Simple Savings.” Other banks include BPI Direct BanKO Inc., Silahis Bank Inc., Makati City-based Metro South Cooperative Bank, and Tonik Digital Bank Inc., each with their unique names for the account.
The BSP attributes the growth in BDAs to the conversion of transaction accounts opened under the Philippine Identification System (PhilSys) co-location strategy in the fourth quarter of 2022. This resulted in an additional 7.5 million accounts. The co-location strategy, established by the Philippine Statistics Authority and Landbank, aims to onboard unbanked PhilSys registrants into the formal financial system.
The BSP is leading the implementation of the National Strategy for Financial Inclusion (NSFI) 2022-2028. The strategy focuses on advancing inclusive digital finance and improving financing access for micro, small, and medium enterprises (MSMEs). Embracing digital technologies is expected to narrow the financial inclusion gap and empower microfinance firms in the country.
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