Most Pinoy families have no bank accounts
Eight out of 10 Filipino households do not have bank deposit accounts, some rely on 'paluwagan'

MANILA, Philippines [UPDATED] – Most Filipino families do not put money in the bank.

The Bangko Sentral ng Pilipinas’ (BSP) first Consumer Finance Survey showed that 8 out of 10 Filipino households, or 78.5% of the total, do not have deposit accounts.

Instead, they keep their money in “shadow banking” entities such as savings and loan associations and the paluwagan, a Filipino tradition of pooling funds in neighborhoods and offices, with members taking turns in receiving money.

“Among those with no deposit accounts, the main reason cited by 92.8% of households was that they did not have enough money for bank deposits,” said BSP Assistant Governor Cyd Amador.

Other reasons include the lack of need for an account (1.7%), difficulty managing an account (1.5%) and high minimum balance requirement (1.2%).

For those who maintain bank deposits, 6 out of 10 have interest-paying accounts.

This means that a significant number of the accounts have “an average daily balance below the required amount to earn interest or have earned a negligible amount of interest,” the survey showed.

The survey was conducted between November 2009 and January 2010 using 2008 expenditures data, and had a sample size of 10,520 households consisting of 3,872 households from the National Capital Region and 6,648 households outside NCR.

Credit card, insurance

Because most Filipino households are still “unbanked,” they have limited access to credit cards and insurance plans. 

Only 4% of households have credit cards, and of the number, majority or 63.6% own only one card.

Moreover, the survey showed that only 3 in 10 household members are covered by health insurance. About 93% of those covered are insured under state-run Philippine Health Insurance Corp., while 4% are insured by private health insurers. 

In terms of pension or retirement plans, the BSP survey also found out that 42.7% of the respondents have at least one retirement or insurance plan from either government or private companies.

House and other assets

The BSP said many Filipino families own their own homes, with 68.8% saying it’s their main asset. Most of them acquired their homes through cash payment or inheritance.

About a quarter or 24.3% of the households have at least one vehicle, mainly motorcycles (54.9%), then cars, SUVs and vans (32.2%).

Apart from a house, majority or almost 90% of Filipino households consider their home appliances as their biggest asset. 

More education

Amador said the BSP will work toward a more inclusive financial system that will reach out to households that are out of the system.

She said it is also important to encourage households to use banks to protect them from loan sharks that charge high interest rates.

“By way of education, we can do a lot in terms of inculcating financial safety.” –

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