The House of Representatives has approved on second reading a measure on financial inclusion that its lead author said is part of a reform package designed to let Government upgrade the delivery of its future social amelioration programs (SAPs)—and avoid a repeat of the hitches that had mired the initial release of cash subsidies to 18 million poor and low-income hardest hit by the coronavirus pandemic.
The chamber passed House Bill (HB) No. 1297 in support of President Duterte’s policy on financial inclusion, after it was passed by the House Committee on banks and financial intermediaries chaired by Quirino Rep. Junie Cua, said Deputy Speaker and the bill’s lead author LRay Villafuerte.
“This bill endeavors to attain financial inclusion for the Filipino people.”
HB 1297 or the proposed ‘Bangko sa Baryo Act” seeks to authorize “cash agents” to help serve the banking needs of people living in faraway places without banks.
Villafuerte said HB 1297 empowers the chosen “authorized cash agents” (ACAs) to assist in performing a broad range of bank services, including forwarding account opening applications, cash-in, and cash-out services, and initial customer identity verification.
Deputy Speaker Henry Oaminal, who chairs the panel’s technical working group (TWG) that studied the bill, had endorsed HB 1297 during the virtual hearing of the House banks committee last week.
Trade Union Congress of the Philippines (TUCP) party-list Rep. Raymond Democrito Mendoza had moved for the bill’s approval.
This “Bangko sa Baryo Act” is one of the trio of measures that Villafuerte has been pushing under the “new normal” scenario, to avoid repetition of the initial delay in the release by the Department of Social Welfare and Development (DSWD) of P200 billion-worth of cash aid to 18 million underprivileged families under the SAP, which is billed as the biggest social protection initiative ever in the country’s history.
More than 36% of municipalities in the country have no banking presence.
Villafuerte’s must-do list also includes the speedy and full implementation of the Philippine Identification System ID (PhilSys) project of the Philippine Statistics Authority (PSA) and the National Broadband Program (NBP) of the Department of Information and Communications Technology (DICT).
The fast-track implementation of the NBP and the National ID project are among the features of the substitute bill HB 6864 or the “Better Normal in the Workplace, Public Spaces and Communities toward a Sustainable Recovery from the COVID-19 Pandemic Act of 2020,” which was earlier approved by the House Defeat COVID-19 Ad Hoc Committee (DCC) chaired by Speaker Alan Peter Cayetano and co-chaired by Majority Leader Ferdinand Martin Romualdez.
The original version of HB 6864 was authored by Speaker Cayetano and Villafuerte along with 196 other solons, and is due for House approval on third and final reading.
Villafuerte, who co-chairs the DCC social amelioration cluster with Ormoc City Rep. Lucy Torres Gomez, said: “We need to harness digital technology to bring people closer to their government, more so in the ‘new normal’ scenario after this COVID-19 crisis where variations of modified quarantine and social distancing might become the way of life and the government will probably need to extend subsidies to pre-selected groups of families and certain business sectors whenever necessary.”
The lead author in the House of Representatives of Republic Act (RA) No. 11469 or the Bayanihan to Heal as One Act that cleared the way to the SAP, said the DSWD could have easily distributed the cash aid if the PSA’s National ID project was already in place, as this identification system would have profiled the 18 million target households, including their respective home addresses.
Also, Congress needs to pass the “Bangko sa Baryo” bill, he said, so the government could download the cash in an instant to each and every family not only through the accredited banks, remittance centers and pay platforms like GCash and PayMaya, but also through the bill-proposed ACAs that the Bangkok Sentral ng Pilipinas (BSP) and contracting banks are to tap to serve the banking needs of people in faraway barrios where there are no bank branches.
The World Bank has estimated that 60% of Filipinos remain unbanked while the Asian Development Bank (ADB) bared that only 28% of Filipino adults own bank accounts, Villafuerte said.
Citing Asian Development Bank (ADB) studies, Villafuerte said only 28% of Filipino adults own a bank account and only about 15% save money with a formal financial institution over a 12-month period, while only 10% borrow money from formal institutions over a similar timeframe.
Villafuerte pointed out in his bill that more than 36% of municipalities in the country have no banking presence.
To make sure the government could make seamless online transfers of cash to beneficiaries of future subsidy programs via all banks, remittance centers, pay platforms or his proposed ACAs, Villafuerte said the DICT needs to expedite its NBP, which aims to deploy fiber optic cables and wireless technologies, to ensure regional connectivity and improve Internet speed, especially in remote villages nationwide.
Under Villafuerte’s proposal, ACAs will have to undergo rigid screening procedures by the contracting bank and the BSP before they can be authorized to perform such functions.
He said his bill was filed back in the previous Congress in response to then-new BSP guidelines and regulations allowing banks to extend their service delivery channels by deploying cash agents, especially in far-flung and unserved areas.
“This bill endeavors to attain financial inclusion for the Filipino people and to establish robust financial consumer protection frameworks,” said Villafuerte.
It also aims to “increase citizen’s financial literacy and capability so they understand different financial services. Soon, an average barrio folk will be able to make sound financial decisions and put his hard-earned money to beneficial use” with the assistance of these ACAs,” he said.