Corporate Governance and Access to Finance - ESBG

The Post Office has 2,817 branches, 25 of which are used as PPSB branches.There are two reasons for this. First, there is an IT connectivity problem inthe post network. And second the fact that PPSB capital is consideredinsufficient by the Central Bank blocks expansion in practice. This situationimplies that PPSB does not benefit from what is normally considered asthe main advantage of postal banks, namely the capillarity of the postalnetwork. This has also significant implications for the access to financepolicies, which are constrained by this limited penetration of the network.The limited number of ATMs (32, 25 of which are in the branches) doesnot contribute to provide local and regional outreach either.For the PPSB to be able to use the post office network, it would first needto find a solution to the capital increase problem. The plan is alsodependant on the Central Bank forthcoming regulation on “third partyentities as agent banks”, which includes a reference to the Postal network:“government-owned post offices form part of the Bangko Sentral ngPilipinas financial inclusion scheme” 40 . According to interviews with thecentral bank, this regulation will probably relax the conditions for the useof agents, which may benefit the outreach capacity of PPSB.This regulation also considers building the policy framework that willallow thrift and rural banks to network with retailers such as 24-hourconvenience stores, particularly those based in provinces. This frameworkwill help to service underserved areas in the country that have yet to bereached by banks that tend to operate in highly urbanized areas.The financial inclusion strategy of the Central Bank includes other optionslike tapping third-party entities such as sari-sari stores (conveniencestores) to act as bank agents in the use of electronic cash transfers.Under this plan, sari-sari stores will be allowed to act as cash centreswhere Filipinos can buy or cash e-money. It is important to bear in mindthat the Philippines is one of the leading countries in the world in the useof e-money and M-Banking, along with Kenya and South Africa. The planwill also include big chain stores. This scheme seeks to provide everyFilipino access to financial services, which now are hardly accessible bythose in rural areas.40 BSP Regulations in the Pipeline, Updates on BSP Supervised/Regulated FinancialInstitutions, Bangko Sentral Ng Pilipinas, Supervision and Examination Sector, September2009.134