National ID to Ease Banking Requirements for Filipinos
The Bangko Sentral ng Pilipinas (BSP) signed a deal with the Philippine Statistics Authority (PSA) to subsidize the production and distribution of blank cards for the Philippine Identification System (PhilSys) or the country’s national ID scheme, in hopes of growing financial inclusivity among Filipinos by reducing the documents required to open bank accounts.
Under Republic Act 11055, also known as the Philippine Identification System Act, the presentation of a PhilID is sufficient proof of identity for transacting business with private entities. Upon authentication, the ID can be used to open bank accounts and other financial transactions, among other services that require proof of identity.
According to the Memorandum of Agreement (MOA) signed on Monday, the BSP is set to produce the blank cards for the national ID. The agency will be contributing ₱3.4 billion to subsidize the production of 116 million cards, valued at ₱30 per card. Meanwhile, the PSA will be in charge of collecting and securing all consolidated data of all national ID registrants in the database.
During the MOA signing of the two government agencies last October 7 at the Philippine International Convention Center (PICC), BSP Managing Director Pia Roman-Tayag noted the PhilSys’ significance in uniting registered Filipinos to local financial institutions.
“One of the biggest barriers in opening an account is proof of identity and not having the necessary documentary requirements. The way that PhilSys is designed is that even those without initial documentary requirements, the law provides some provisions in which they can register,” BSP Director Tayag explained.
The national ID will serve as a necessary element of BSP’s digital financial inclusion agenda, where it provides an opportunity to include people in the financial system who are unable to open a formal account due to the lack of an acceptable ID.
Bank rules, like the current Know-Your-Customer (KYC) set-up, will be replaced by the national ID as it will serve as the equivalent of two government-issued ID requirements for opening a bank account under existing KYC rules.
“So even the most vulnerable, those who have not been partially identified, can be identified through the PhilSys. And that is the connection for them to be now KYC’d (Know Your Customer) and have an account. And as we know with an account, they can already access a range of financial services,” she added.
“Now with this national ID, all you need is this to open an account. So that is very helpful for most of our unbanked sectors,” affirmed BSP Governor Benjamin E. Diokno in a press conference.
Pilot-testing for the national ID started in September and the PSA Undersecretary Claire Dennis S. Mapa announced that the tests would run until May 2020, with the formal rollout of the ID registration by July of the same year.
Philsys’ first issuance of the IDs is scheduled to be from 2020 until 2022 and will initially be free of charge.
