By Satur C. Ocampo
At Ground Level | The Philippine Star
This week the P14.12-trillion Philippine banking system was the subject of news reports in two contrasting lights.
On the one hand, Philippine banks — particularly the big universal and commercial banks — were praised for being well capitalized and “among the most best-placed [in Southeast Asia] to cope with new international regulations designed to protect economies from weaknesses coming from the [global] financial sector.”
On the other hand, the banking system was criticized as “an elitist system in which the greater number of Filipinos, with the greatest need for financial services, remains effectively excluded.”
The paean came from credit-rating firm Moody’s Investor Service. It cited Philippine banks (under Bangko Sentral ng Pilipinas regulation) for exceeding the global norm of 6% minimum and 8% overall capital adequacy ratio — a buffer against potential losses — set by the Basel III regime. Philippine banks maintain 7.5% minimum and 10% overall ratios.
(However, Philippine banks remain weighed down by P82.816 billion in bad assets they acquired as loan collaterals during the 1997 Asian financial crisis. Standard and Poor’s, another credit-rating outfit, blamed this condition for the banks’ main focus on commercial lending to big companies and trading in treasury notes — but which netted them P32.77-billion profits in the first quarter of 2015.)
The elitist tag emerged from a special report, run by the Business Mirror, based on data provided by the World Bank and BSP. For instance:
• Only 31% of Filipino adults own a bank account, the smallest percentage (called “banking penetration level”) among the five original ASEAN member-states. The comparative figures are: Indonesia, 36%; Thailand, 78%; Malaysia, 81%; and Singapore, 96% (per 2014 World Bank Global Findex Data, released last April).
Such low banking penetration level, the World Bank pointed out, parallels the figures for per capita gross domestic product, with our country chalking up the lowest. The figures are: Philippines, $2,765.1; Indonesia, $3,475.1; Thailand, $5,779; Malaysia, $10,538.1; and Singapore, $55,182.5.
To boost GDP growth and reduce poverty, the International Monetary Fund urged increasing the provision of bank services. This, it added, would boost consumption spending, encourage entrepreneurship and investments by micro, small and medium enterprises, and reduce the recourse to informal lenders at usurious rates.
The Asian Development Bank chimed in, saying: In 2005, almost 2/3 (or 17 million) of poor Filipino families couldn’t access microfinance services – although 4.1 million families engaged in microenterprise activities.
BSP data show that as of end-March 2015, there were 10,456 bank branches and 16,068 automatic teller machines installed in the country. However, 595 municipalities, out of 1,490 (more than 1/3), don’t have banking facilities.
Why haven’t more Filipinos opened bank accounts (even among the so-called middle class, only 30% have accounts)? Per the BSP National Baseline Survey on Financial Inclusion, here are the reasons:
Majority (65.1%) of respondents cited “lack of funds” as the main hindrance; 16.9% said they didn’t need a bank account; 11.2% claimed it’s expensive to maintain one; 9.8% found the minimum deposit balance required too high; 7.6% said the nearest bank was too far away; 4.6% claimed they had no valid IDs; 3.3% said the interest rate was too low; and 2.5% didn’t trust the banks.
The BSP avers that it has begun taking steps to bring banking services to the majority of Filipinos, but hasn’t adopted any timeline for its fulfilment.
Meantime, I got an emailed request from two co-founders of a social-media group called Call Center Philippines, Alvin Felipe Gultiano and Karl Anthony Marquez. They are requesting this space to help publicize their letter to the National Council on Disability Affairs calling attention to the plight of call-center/business process outsourcing workers who are persons with disabilities, or PWDs.
Space limitation disallows me from running the full letter, addressed to Carmen Reyes-Zubiaga, NCDA executive director. So let me just cite or paraphrase its salient points:
•Many PWDs have found gainful employment in the BPO industry (no definite number given). An example: Antonio Baradi, who has worked for 10 years and has been promoted to operations manager. His being a PWD “mattered much less than his capacity, talent and skill,” and his success story “continues to inspire other PWDs seeking stable, rewarding and fulfilling employment.”
• But for Antonio and fellow PWDs “going to and from BPO centers is a big struggle since the infrastructure to make their trips easier are not there. Going to office and returning home safely is a big obstacle course for PWDs working in BPOs.”
• To address this problem – by establishing a PWD-friendly environment –, NCDA is urged to coordinate with local government units in areas with high concentration of BPO offices: Metro Manila, Metro Cebu, Bacolod, Baguio, Cagayan de Oro, Clark, Dagupan, Davao, Dumaguete, Iligan, Iloilo, Iriga, Lipa, Naga, Olongapo,Tacloban, Urdaneta, and other cities.
• “Measures like having unobstructed sidewalks, railings, wheelchair-accessible entrances, 1.2-meter-wide ramps, and PWD exits and bathrooms will go a long way in helping improve work and mobility for PWDs working in (BPOs) around the country.” (In fact, Batas Pambansa Blg. 334 and related laws require the provision of such facilities.)
• Furthermore, commercial establishments should adhere to the discounts (20%) and priority access mandated by the Magna Carta for Persons with Disability. After all, the letter pointed out, many businesses benefit from the economic boost of the BPO industry in these cities.
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Published in The Philippine Star
July 4, 2015