Banks’ basic deposit accounts (BDA) reached seven million in the first three months of 2021, up by 51 percent compared to same period last year of 4.6 million, according to the Bangko Sentral ng Pilipinas (BSP).

Peso bills

The BSP said these deposit accounts for the mass market amounts to P4.8 billion, more than P4 billion same time in 2020.

The number of banks offering BDAs have increased to 132 as of the end of the first quarter compared to 121 banks in 2020. The BDAs were first introduced in 2008.

BDAs are low-cost, no-frills account and its initial deposit should not exceed P100.

It is an interest- or non-interest-bearing account designed to promote financial inclusion. Its key features also include no minimum maintaining balance and no dormancy charges.

The BSP has been encouraging banks to promote use of the BDA for financial inclusion.

“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,” said BSP Governor Benjamin E. Diokno on Monday, Nov. 8.

The 2019 BSP Financial Inclusion Survey showed that 29 percent or 20.9 million Filipino adults have bank accounts. The top three considerations when opening an account are 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,” said the BSP.

“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,” said the BSP.

Banks with BDAs enjoy zero reserve requirement ratio as perks. However, the BSP will impose reserves when the account balance exceeds P50,000 to “prevent misuse of basic deposit account”. When it is more than P50,000, the host bank will convert a basic deposit account to a regular account.

Basic deposit accounts also enjoy reduced KYC or “Know Your Customer” requirements but the moment the balance increases above the threshold, they will automatically be shifted to an enhanced KYC scrutiny.

Banks are generally granted the “liberty to customize their product offerings” according to their niche market or “based on the needs of the identified market” when it comes to basic deposit accounts.

Source: Manila Bulletin (