Bank exec: Lack of financial literacy, branches among reasons for 'significant' unbanked Filipinos

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Metro Manila (CNN Philippines, November 12) — A huge number of Filipinos still do not have bank accounts due to reasons other than lack of income, a bank official said Friday.

"There's also a lack of financial literacy. Individuals are not familiar with the benefits of savings, of keeping their money in banks. There's also, I suppose a lack of access particularly in remote areas — there are not enough branches," BDO senior vice president Dante Tinga, Jr. told CNN Philippines' The Exchange.

Tinga, who also serves as the listed bank's director of research and investor relations, added that requirements needed to open bank accounts — like valid IDs — get in the way as well.

About 36.9 million Filipino adults have no bank account as of the fourth quarter of 2020, data from the Bangko Sentral ng Pilipinas showed. This is 48% of the country's adult population.

"You do have a significant unbanked population in the Philippines but we see that as an opportunity rather than just a risk, especially as the issues are related to things other than low income levels," the BDO executive said.

Tinga also noted that these issues can be addressed, or are currently being addressed, citing the government's efforts to implement the national ID, and promote financial literacy as examples.

"The banks, including ours, are opening branches in remote or underserved areas of the country, and also using technology to access these undeserved areas. Hopefully, we cast a wider net, we make it easier for individuals to open accounts," he said.

After months of contraction due to uncertainties caused by the COVID-19 pandemic, bank lending finally grew by 1.3% in August — followed by a 2.7% expansion in September.