MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is urging private sector employers to use transaction accounts to credit salaries and wages of their employees.
BSP Deputy Director Cesar Augusto Villanueva Jr. emphasized that transaction accounts widen workers’ access to financial services and enhance their financial welfare. This was highlighted during the International Labor Organization’s ‘Webinar on Advancing Financial Inclusion through Wages Digitization.”
“We would like to encourage private sector employers to consider using transaction accounts to credit salaries and wages, as this can enable workers to easily access financial services,” Villanueva said.
He pointed out that deposit, e-money and other financial accounts enable electronic transactions such as fund transfers, online receipt of salary, government pension and aid, bills payments, and e-payments with merchants and vendors.
“By owning a deposit or e-money account, workers can be provided greater access to financial services that can enhance their welfare,” Villanueva added.
According to Villanueva, there is an opportunity to heighten the use of digital payments in the labor sector as “70 percent of those surveyed from the private sector typically receive their salaries and wages through manual methods such as cash or check,” based on the BSP Financial Inclusion Survey for 2021.
He said increasing account ownership supports the BSP’s financial digitalization initiatives toward achieving inclusive economic growth.
Under its Digital Payments Transformation Roadmap, the BSP aims to shift 50 percent of total retail transactions to electronic channels and increase the number of banked Filipino adults to 70 percent by the end of 2023.
With the COVID-19 restrictions serving as catalyst, the share of digital payments to total retail transactions further increased to 42.1 percent in 2022 after accelerating to 30.3 percent in 2021 from 20.1 percent in 2020.
Merchant payments, peer-to-peer remittances and business transactions of salaries and wages were the key contributors to the increase in digital payments.
Likewise, the number of Filipino adults with bank accounts almost doubled to 56 percent in 2021 from 29 percent in 2019 as about 22 million Filipinos gained access to formal financial accounts.
According to the BSP, the increase was driven by faster growth in digital payments.
About 36 percent of all Filipinos had e-money accounts in 2021 from only eight percent in 2019.