The number of so-called basic deposit accounts (BDA) rose 170 percent in the first three months this year to 21.9 million from only 8.1 million a year ago, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
The increase allowed the deposits to hit P27 billion, a 432 percent rise from P5.1 billion in the first quarter in 2022.
According to the BSP, this was made possible in no mean part by a small plastic card that fits in the palm of one’s hand, one that the Land Bank of the Philippines (Land Bank) and the Philippines Statistics Authority (PSA) jointly endeavored to place in the hands of millions of unregistered Filipinos.
The PSA cards issued under the Philippine Identification System (PhilSys) were made readily available to millions of Filipinos under a so-called co-location program with the Land Bank that successfully onboarded 7.5 million previously unregistered Filipinos excluded from the formal banking system.
Co-location meant empowering 7.5 million income-generating Filipinos with a credit card-sized identification with biometrics that now tell previously unwilling banks to provide this much number of the population with a basic deposit account that in some cases earn interest for accountholders.
BDAs typically do no earn interest but some banks, given a minimum amount of deposit, do grant accountholders interest income for their money.
The PhilSys ID and entry into the formal banking system no doubt were incentives for unregistered Filipinos to convert non-interest paying transaction accounts into BDAs.
Three expanded license banks or universal banks, the Land Bank of the Philippines, the Al Amanah Islamic Investment Bank and the Rizal Commercial Banking Corp. now offer BDAs that while generally non-interest earning, do not impose a minimum balance but added 4.3 million newly opened accounts.
The Philippine Bank of Communication (PBCom) and Robinsons Bank Corp. recently bought by the Bank of the Philippine Islands also offer BDAs as commercial lenders and 71 other thrift and rural banks that include CARD Bank Inc, Sterling Bank of Asia, BPI Direct Banko, China Bank Savings, among others.
Introduced by the BSP in 2018, the BDAs meet the needs of the unbanked and low-income sector for affordable and easy-to-open bank accounts.
It has a low opening deposit requirement of P100 or less, simple identification requirements, no maintaining balance requirement and no dormancy charges.
With BDAs, more Filipinos can open a savings account that is interest-earning in selected banks and insured by the Philippine Deposit Insurance Corporation.
