No-Frills Deposit Account Pursued By BSP Up By 50%

Bangko Sentral ng Pilipinas’ (BSP) data reveals that the number of Basic Deposit Accounts (BDAs) in Q12021 increased by 51 percent to 7.0 million from 4.6 million in Q12020. This can be attributed to BSP’s call for banks to promote the use of the BDA to foster financial inclusion.

Photo Insert: To date, 132 banks offer Basic Deposit Accounts or BDAs, with total deposits amounting to Php 4.8 billion in Q12021.

To date, 132 banks offer BDAs, with total deposits amounting to Php 4.8 billion in Q12021. This marks an increase from the 121 banks with total BDA deposits of Php 4.0 billion in Q12020.

The BSP introduced the BDA Framework in 2018 to encourage more Filipinos to open bank accounts. “Account ownership enables Filipinos to conduct financial transactions in a safe, convenient, and affordable manner. It is also a gateway to financial products and services like savings, loans, investments, and insurance.” BSP Governor Benjamin E. Diokno said.

The BDA is a low-cost, no-frills account that features an initial deposit requirement capped at Php 100 and simplified identification requirements to open an account. It has no maintaining balance and dormancy charges.

According to the 2019 BSP Financial Inclusion Survey (FIS), only 29 percent or approximately 20.9 million adults have bank accounts. The survey respondents indicated that the top three considerations when opening an account include the initial deposit, interest rate, and maintaining balance.

Next to not having enough money, the 2019 FIS revealed that the second top reason for not owning an account is the perceived lack of need.

To address the issue, the BSP, in collaboration with different sectors, has been continuously building compelling use cases of transaction accounts. These include the use of an account for receipt of wages, benefits and financial assistance from the government, fund transfers, and day-to-day payment transactions.

Another major reason for remaining unbanked is the lack of a valid identification document, an issue that the Philippine Identification System (PhilSys) seeks to address.

To optimize the PhilSys registration mobilization, the Land Bank of the Philippines has partnered with the Philippine Statistics Authority to enable unbanked PhilSys registrants to open an account at registration centers.

To date, 5.9 million previously unbanked Filipinos have opened an account under this arrangement.

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