Press Release
July 22, 2020

Banking services should reach remote communities - Poe

People living in far-flung communities deserve access to banking services that could help improve their lives, Sen. Grace Poe said as she pushed for her "Bangko sa Baryo" bill.

Poe's proposed measure filed as Senate Bill 1682 seeks to expand the reach of banks by tapping "cash agents" such as reputable convenience stores, pharmacies and other highly accessible retail outlets to service unbanked and underserved Filipinos.

Through these cash agents, the people can perform secure online, real-time withdrawal or deposit transactions for his/her own bank account, fund transfers, bill payments, and self-service transactions, explained Poe, chairperson of the Senate committee on banks, financial institutions and currencies.

Cash agents may also accept payments due to government institutions, such as contributions to the Social Security System and premiums payable to the Philippine Health Insurance Corporation, PAG-IBIG and others.

"In many parts of the country, people are unable to borrow and receive financial help because they lack access to banks, which are often located long distances away," Poe said.

The bill is geared toward incorporating larger segment of the country's population into the financial mainstream, in line with the government's thrust to promote greater financial inclusion which remains a challenge.

"Our ordinary folks should no longer cross rivers or climb mountains just to reach the bank in their locality in order to gain access to much needed resources that can help better their lives," said Poe.

"They should not also be made to borrow or shell out the little money that they have just to make the trip to the bank, which must instead be brought closer to them," the senator underscored.

Citing Bangko Sentral ng Pilipinas (BSP) data, around 60 percent of the country's adult population (aged 15 above) remains unbanked as of 2017. Only 15 percent save money while 10 percent borrow money from formal financial institutions. Accessibility and cost have been the primary obstacles toward financial inclusion, with around 33 percent of cities and municipalities having no banking presence, BSP said.

In January 2017, the central bank released guidelines that allowed banks to serve clients through cash agents contracted by banks to accept and withdraw cash without prior BSP authorization. The services include withdrawals and fund transfers, online self-service deposits, bill payments, collection and forwarding of application documents for loan and account opening, among others.

The BSP guidelines also state that cash agents may also perform know-your-customer procedures, as well as sell and service insurance as authorized by the Insurance Commission.

Poe said her bill seeks to incorporate the BSP guidelines and strengthen the safeguards to secure transactions.

It stressed that the contracting bank remains ultimately liable for the actions of their cash agents, thus, they should ensure that agents pass eligibility requirements and BSP evaluation procedures, follow standard bank protocols, and exercise due diligence when dealing with clients.

The bill requires a cash agent applying to a contracting bank to be a duly registered business in the country; has engaged in commercial activity for at least three months; has the necessary infrastructure to undertake banking operations; has conducted commercial activities continually in a place and area known to the public; and has sufficient capacity to operate electronic devices.

According to the measure, a cash agent that establishes operations in a remote area will be entitled to free training of personnel on various bank processes to be conducted by the BSP. Processing of permits and certificates required for the operation will also be expedited.

Local government units are also encouraged to grant incentives to cash agents and to provide financial literacy training to their respective communities

"We must not fail to reach out to our most vulnerable countrymen by helping them meet personal and livelihood needs and aspirations through an inclusive banking system," Poe said.

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