OK of bill seen to boost financial inclusion plan

A senior lawmaker has called for the swift congressional approval of a House-approved Bangko sa Baryo Act that aims to provide last-mile financial connectivity in unbanked communities nationwide through electronic means.

Camarines Sur Rep. Luis Ray F. Villafuerte said the swift congressional passage of House Bill (HB) 6924 will accelerate the government’s goal of financial inclusion for all Filipinos and open new livelihood opportunities in faraway communities either unserved or underserved by the formal banking system.

“We can leverage digital technology to convert convenience stores, pharmacies and other highly accessible retail outlets to act as additional service delivery channels of banks, especially in unbanked communities, by acting swiftly on this measure,” Villafuerte, lead author of the proposed bill, said.

Citing a study commissioned by a digital banking solutions provider, Villafuerte said unbanked and underbanked segments in the Philippines are expected to decline to 20 percent of the bankable population because more Filipinos are willing to shift to digital banking amid the pandemic.

Based on the report, three out of five, or 60 percent, of bankable Filipino customers are willing to shift to digital banking, the lawmaker said.

Villafuerte said 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 swift passage of the proposed Bangko sa Baryo Act. He added the bill seeks to enable banks to reach far-flung communities by tapping retail outlets as their cash agents.

HB 6924 was approved by the House of Representatives on third and final reading in August last year.

A counterpart measure filed by Sen. Grace Poe Llamanzares remains pending in the Senate.

Since 2017, the BSP has already authorized retail outlets such as stores and pharmacies to operate as cash agents through its Circular 940. Banks were also allowed to set up branch-lite units (BLUs) through Circular 987, in line with the BSP’s goal of realizing 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.

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; has sufficient capacity to properly operate electronic devices; and has the necessary infrastructure to undertake banking operations.

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