To help accelerate the goal of financial inclusion among all Filipinos as envisioned by President Rodrigo Duterte, Camarines Sur Representative LRay Villafuerte has called for the swift congressional approval of the House-approved measure that will allow convenience stores, pharmacies and other highly accessible retail outlets to act as additional service delivery channels of banks in remote and unbanked communities.
Villafuerte said the Congress can help the Bangko Sentral ng Pilipinas (BSP) meet its target of at least 70 percent of adult Filipinos having bank accounts by December 2022 at the earliest with the passage of the proposed Bangko sa Baryo Act, which would enable banks to reach far-flung communities by tapping retail outlets as their cash agents.
A counterpart measure has been filed in the Senate by Sen. Grace Poe Llamanzares that remains pending at the committee level.
House Bill (HB) 6924 was approved by the House of Representatives on third and final reading last Aug. 11, and was received by the Senate on Aug. 19.
A counterpart measure has been filed in the Senate by Sen. Grace Poe Llamanzares that remains pending at the committee level.
HB 6924 was authored by Villafuerte; Rep. Junie Cua, who chairs the House Committee on Banks and Financial Intermediaries; and eight other lawmakers.
“COVID-19 has made it imperative for us to act fast in realizing President Duterte’s goal of financial inclusion for all Filipinos as those who are unbanked or have no access to financial services were the least prepared financially to cope with the economic impact of the pandemic,” Villafuerte said.
The cash grants under the government’s social protection programs could also have been efficiently and rapidly distributed if the beneficiaries had national IDs along with bank accounts or access to digital payment channels, said Villafuerte, who was the lead author of the House-approved versions of the Bayanihan to Heal as One Act or Republic Act (RA) No. 11469 and the Bayanihan to Recover as One Act (RA 11494).
He expressed the hope that senators would take prompt action on this measure as the Congress officially resumes session this week following its latest recess. (The Senate resumed a week earlier to start discussing the proposed 2021 national budget bill, but it suspended session last Nov. 12 in the wake of Typhoon Ulysses that battered Metro Manila.)
“I hope that the Senate will act swiftly on Senator Poe’s counterpart measure on our proposed Bangko sa Baryo Act so that we could have it passed this year,” Villafuerte said.
“COVID-19 has made it imperative for us to act fast in realizing President Duterte’s goal of financial inclusion for all Filipinos as those who are unbanked or have no access to financial services were the least prepared financially to cope with the economic impact of the pandemic.”
Since 2017, the BSP has already been allowing retail outlets such as stores and pharmacies to operate as cash agents through its Circular 940 and has allowed banks to set up branch-lite units (BLUs) through Circular 987 in line with its goal of at least 70 percent of adult Filipinos having bank accounts as early as December 2022 or by 2023.
As a result, around 40,000 cash agents have been actively operating in the country along with over 1,800 BLUs before the onset of the COVID-19 pandemic, according to the BSP.
Villafuerte said that while the BSP already has the regulations in place for the establishment of cash agents for accredited banks, it can only realize its goal of making 70 percent of adult Filipinos financially inclusive by ensuring that banks focus their off-branch operations in far-flung areas through the passage of the Bangko sa Baryo bill.
According BSP Governor Benjamin Diokno, COVID-19 has prompted many Filipinos to resort to e-payment platforms, with over 4 million new accounts opened via digital platforms, along with new online sign-ups and app downloads for digital financial services during the pandemic.
Diokno also said that based on the BSP’s 2019 Financial Inclusion Survey (FIS), account ownership increased to 29 percent from 23 percent in 2017.
Among the poorest, account ownership hit 27 percent, closer to the national average and nearly double the 14 percent previously reported, Diokno added.
Under HB 6924, a cash agent may file an application with a contracting bank if it meets the following requirements: it is a duly-registered business in the Philippines; has engaged in commercial activity for at least three months; has conducted commercial activities continuously in a place and area that is known to the public, and possess sufficient capacity to properly operate electronic devices; and has the necessary infrastructure to undertake banking operations.
The contracting bank will be responsible for deploying to their cash agents the devices that will enable customers to perform secure online, real-time deposit and withdrawal transactions on their own bank accounts, fund transfers, bills payment, and self-service transactions, the bill states.
Cash agents may accept and disburse cash on the bank’s behalf in connection with self-service transactions of customers that include deposits and withdrawals, fund transfers, bills payment and payment to government institutions such as the Social Security System (SSS), Philippine Health Insurance Program (PhilHealth) and others.
Under the bill, cash agents may also collect and forward applications for bank account openings and loan application documents to the contracting bank; perform initial customer identity verification for the purpose of conducting due diligence investigations and preventing illegal activities; and conduct other transactions, including accepting payments and cheque encashment.
To encourage cash agents to set up in remote areas, they will be entitled to incentives, such as free training on banking services, expedited processing of the necessary permits and certificates, including those issued by the local government units, the bill states.
HB 6924 prohibits cash agents from subcontracting its operations or business to third parties.