No banks in 70% of Eastern Visayas towns: BSP

TACLOBAN CITY, May 30  -- At least 70 percent of towns in Eastern Visayas have no banks, making the region as one of the most unbanked areas in the country, according to the Bangko Sentral ng Pilipinas (BSP).

As of end of last year, 95 out of 136 towns in six provinces have no banks, raising concern that people are deprived of access to and usage of formal financial products and services.

Of the 95 "unbanked" areas, 25 are in Leyte, 21 in Northern Samar, 18 in Samar, 13 in Eastern Samar, 12 in Southern Leyte, and six in Biliran province, the BSP revealed in its report posted on its website.

Northern Samar, the farthest province from the regional capital, is the most underbanked in the region with 21 out of 25 towns having no access to banking services.

Banking services is only limited in 41 towns, however, there’s an improvement than in 2016 where only 33 towns had operating banks. The BSP noted banking services expansion in Leyte, Eastern Samar, Samar, and Southern Leyte.

Regional Development Council banking sector representative Francisco Barredo said more banks have opened branches in the region, but these are concentrated in provincial capitals and major commercial districts.

“High banking penetration is expected in cities than in rural areas because of large population,” Barredo said in a phone interview Wednesday.

In a statement, the BSP said that unbanked areas are being served by non-bank financial service providers such as mobile money agents, pawnshops, cooperatives, and microfinance non-government organizations.

The Central Bank earlier approved regulation allowing banks to put up “branch-lite” units to further expand the physical reach of banking services especially to unbanked and underserved LGUs.

The Monetary Board also approved a new circular in January setting out the framework for banks to offer a basic deposit account to promote account ownership among the unbanked.

The minimum key features of the basic deposit account include simplified know-your-customer requirements; an opening amount of less than PHP100; no minimum maintaining balance; and no dormancy charges.

Meanwhile, bank deposits in Eastern Visayas grew by 15.56 percent to PHP109.33 billion in 2017, higher than the PHP94.61 billion a year earlier, according to the Philippine Deposit Insurance Corporation (PDIC) report.

Bank deposits in the region managed to maintain its double-digit annual growth rate in the past five years despite impacts of the 2013 super typhoon Yolanda.

Last year’s growth is higher than the 11.23 percent recorded in 2016, but lower than the average of 20 percent growth recorded from 2013 to 2015.

The PDIC banking statistics, posted on its website, showed that total number of accounts grew by 8.44 percent from 868,080 in 2016 to 941,338 last year. (SQM/PNA)