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Saturday, May 21, 2022

The need to save (First of Two Parts)

Just a few weeks back, we observed National Banking Week—a special opportunity that seeks to highlight the benefits banks provide to society.

            National Banking Week, annually held every first week of January, enjoins all banking institutions and their branches to undertake promotional and publicity-generating activities regarding their significant role in the Filipino community, pursuant to Proclamation No. 2250 dated 10 December 1982.

            This year’s theme is “Masaganang Lipunan, Bunga ng Salaping Iniingatan.  Mag-impok sa Bangko.”  

            The Financial Consumer Affairs Group (FCAG) of the Bangko Sentral ng Pilipinas, in its weekly e-newsletter, stressed the need for continuing campaign efforts to highlight the importance of saving in banks.

            Citing the 2009 Consumer Finance Survey conducted by the Bangko Sentral’s Department of Economic Statistics, the FCAG disclosed that eight out of ten or 78.5 percent of Filipino households still do not have a bank deposit account.

            The survey further showed that 92.8 percent of that figure stated “the lack of money” as the primary reason for the absence of a bank account. On the other hand, the remaining 7.2 percent of the households cited the following:

·         do not need a bank/cash account (1.7 percent);

·         cannot manage an account (1.5 percent);

·         minimum balance is too high (1.2 percent);

·         do not like to deal with banks/financial institutions (1 percent); and

·         others not specified (1.8 percent). 

Lastly, the BSP data revealed that households in areas outside the National Capital Region were found less inclined to open bank accounts than those residing in Metro Manila.

“What people ought to realize is that saving money in banks is way more advantageous than keeping it elsewhere such as in piggy banks, in a locked drawer or cabinet at home, or through the traditional under-the-mattress approach,” the FCAG explained.

The FCAG quoted the following reasons on why banks are important from financial websites www.topbusinessfinance.com and lawschool.unm.edu:

·         Safety—The bank remains the safest place to keep one’s money, according to FCAG.  Banks maintain high security facilities that protect a depositor’s money from theft and safeguard it from the elements and other disasters such as fire, floods and the action of rodents or insects. 

·         Interest—Instead of letting your money “sleep” at home, the FCAG advised, deposit it in the bank where it has the potential to earn interest. The amount you get may not seem like much, but rest assured that it grows over time and adds up very quickly (the FCAG referred to this as “the power of compounding interest”).  It stressed: “The earlier you start saving in the bank and if you continue putting more money in the pot, the better.”

(To be continued next week)

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