MANILA, Philippines — Senator Grace Poe has filed a bill seeking to expand the reach of banks in remote areas by tapping “cash agents” like reputable convenience stores, pharmacies, and other highly accessible retail outlets to service unbanked and “underserved” Filipinos.
In filing Senate Bill 1682 or the “Bangko sa Baryo” bill, Poe, chair of the Senate committee on banks, financial institutions and currencies, said those living in far-flung communities also deserve access to banking services that could help improve their lives.
“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 in a statement.
“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,” she added.
The senator explained that through these cash agents, people can perform secure online, real-time withdrawal or deposit transactions for their own bank accounts, fund transfers, bill payments, and self-service transactions.
She said cash agents may also accept payments due to government institutions, including contributions to the Social Security System and premiums payable to the Philippine Health Insurance Corporation and PAG-IBIG.
According to Poe, the bill is geared towards incorporating a larger portion of the country’s population into the financial mainstream.
Citing data from the Bangko Sentral ng Pilipinas (BSP), she said that around 60 percent of the country’s adult population or those aged 15 and above remain unbanked as of 2017. Only 15 percent likewise save money while 10 percent borrow money from formal financial institutions.
Accessibility and cost have been the primary hindrances from financial inclusion, with around 33 percent of cities and municipalities in the country having no banking presence, Poe said, citing the BSP.
Poe’s bill also seeks to incorporate the guidelines released by BSP in January 2017 that allowed banks to serve clients through cash agents contracted by banks to accept and withdraw cash without prior BSP authorization. The bill also seeks to strengthen safeguards to secure transactions with these cash agents.
The contracting bank remains ultimately liable for the actions of their cash agents under the proposed measure. Hence, the banks 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 also requires a cash agent applying to a contracting bank to be a duly registered business in the country; has engaged in business for at least three months; has the necessary infrastructure to undertake banking operations; has conducted commercial activities continually in a place and are known to the public, and has sufficient capacity to operate electronic devices.
Under the bill, cash agents that establish 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.
Poe also encouraged local government units to grant incentives to cash agents and to provide financial literacy training to their respective communities.