Just Released: Study on Savings Landscape in the Philippines

This post is adapted from "Playing with Product Data on SPINNAKER: The Philippines as the Prototype" on the SPINNAKER Network

When cataloguing global data on savings products, we often are asked: “well, what do you DO with the data? What story do they tell?” To help answer those questions, we have created a few initial data visualization and comparison tools on the site. While these tools will no doubt evolve and strengthen with the quantity and quality of data on the site, we hope they provide the community with some opportunities to view and ask questions around existing product data.

This post highlights those tools using the data gathered as a part of an exploratory “deep dive” on savings products in the Philippines, conducted by the Global Assets Project and MicroSave. Throughout the following analysis, all of the scatter plots you see have been constructed using SPINNAKER’s product graphing tool. In addition, you may compare individual products found in our savings product data browser.

Through preliminary research, savings product data surveys, and key informant interviews, the goal of The Philippines Deep Dive was to not only capture the range of savings products for the poor and identify opportunities for further innovative development, but also to help develop data gathering instruments and approaches and identify gaps for future research. From this experience, more country studies and research may be pursued to fill and fuel the SPINNAKER online platform. The full report was just released today.

Pie Charts

In exploring the range of savings products for the poor in the Philippines, this study surveyed 81 products across 27 financial institutions, including:

• 1st Macro Bank
• 1st TRuBank
• 1st Valley Bank, Inc.
• Agdao Multi Purpose Cooperative
• AMA Bank
• Asia United Bank
• Bangko Kabayan
• Bank of Makati, Inc.
• Cebu People's Multi-Purpose Cooperative
• Community Rural Bank of Catmon, Inc. (CEBU)
• Cooperative Rural Bank of Bulacan
• Country Rural Bank of Tagig, Inc.
• Dumaguete Cathedral Credit Cooperative
• Enterprise Bank, Inc
• Fil-Agro Rural Bank, Inc.
• Gata Daku Multi Purpose Cooperative
• GM Bank of Luzon, Inc.
• Green Bank (A Rural Bank), Inc.
• Opportunity Kauswagan Bank
• Panabo Multi Purpose Cooperative
• Philippine Savings Bank (PS Bank)
• Premiere Bank
• RCBC Savings Bank
• Rural Bank of Compostela
• Rural Bank of Guinobatan, Inc.
• St. Martin of Tours Credit and Development Cooperative
• Sta. Ana Multi-Purpose Cooperative (SAMULCO)

The most common savings product type offered was classified by financial institutions as a current account (regular savings) product, which constituted 60% of the total savings accounts surveyed (Figure 1).

Bar Charts

Product data and key informant interviews suggest that generally, regular savings products focus on maximizing accessibility and convenience. In assisting this goal, a key central bank ruling decreased KYC opening requirements by asking for one piece of identification rather than two. Figure 2 highlights the variety of delivery channels and technologies that are employed to supply savings services. Although the Philippines is widely recognized as a leader in mobile banking, savings services are still largely relegated to bank branches. It is important to note, however, that many products use multiple methods to allow clients to choose what is most convenient for them.

Product Feature Comparisons & Scatter Plots

Although being categorized as “regular,” many of the surveyed savings products have particular features that make them accessible to low-income clients. Formal savings accounts in both banks and cooperatives were found to be generally accessible to low-income groups. These findings can be seen more clearly by visualizing the data with SPINNAKER’s product graphing tool. As Figure 3 shows, a majority of products are clustered on the lower end of the minimum opening deposit scale, between USD 0 and 30. The cluster of data points between USD 0 and 10 is created by multiple products overlapping with similarly low minimum opening deposits.

More than 50 percent of all surveyed savings products require PHP 200 (USD 4.54) or below as the minimum opening deposit. Furthermore, 39 percent of bank products require a minimum maintaining balance of PHP 100 (USD 2.27) or below while more than half of the cooperatives surveyed offer at least one product that requires PHP 100 or below.

Similarly, Figure 4 indicates that almost half of current account (regular savings) products surveyed require a minimum opening amount of PHP 100 or less (USD 2.30). These findings are positive indications that the financial institutions targeted in this survey are welcoming micro-depositors.

Next, let’s focus on products targeted toward a specific market: child and youth savings products. Interestingly, of the surveyed current account (regular savings) products, one in five were geared towards youth and children. Figure 5 compares the interest rates and minimum opening deposits of all the current account products surveyed. When using the live graphing tool, you’ll be able to hover over each point and see the name of the product. If you click on a point, additional details will appear below the graph, along with a link to the product’s full data page. In the live version of Figure 5, a quick mouse over the products reveals that many of the youth products are found in the highlighted section, which represents the lower end of the minimum opening deposit spectrum.

Zooming in and Linking Banks to Product Details

Using the graphing tool’s zoom button, we’re able to focus on the highlighted section of Figure 5. Next, because we are interested in child and youth accounts we can use the faceted search to choose “Child, Youth”, the results of which are shown in Figure 6. While there is no obvious relationship between interest rate and minimum opening deposit, using SPINNAKER’s product comparison tool to see the products in relation to each other allows us to notice the outliers and explore their characteristics to see what makes them unique. For example, from Figure 6, we know to ask what allows Gata Daku Multi Purpose Cooperative’s ‘Youth Savings Account’ to have such a relatively high interest rate and relatively low required opening deposit (highlighted in blue). If we take a closer look at its product details, we notice that it uses a Mobile Teller Machine (MTM). While more information and data would be needed to make a definitive conclusion as to whether use of MTMs lowers transaction costs and passes on better product features to clients, looking at product level data in this manner can lead us to new questions around effective product development.

Finally, some of the most interesting data has to do with uptake. Unfortunately, this is one of the most difficult data points to attain, for a variety of reasons: oftentimes, product performance data are often sensitive and proprietary and/or institutions often lack the technological capacity to measure performance on a product level. Even with these data gaps, however, we can still pull out some interesting findings.

In Figure 7, there is no direct relationship between interest rate and number of accounts. However, there are four products with a 2% interest rate, but their uptake are widespread, ranging from 237 to 18,567 accounts. Thus, in order to find out what makes these products reach more or less clients, we know that future research in this area is needed. Customers may be looking at features or conveniences other than interest rate when deciding what details are most relevant. Or, the variation in uptake may be explained by differences in geography and population density: some products may be available in very rural areas and others in urban centers or a product may be offered by a bank with multiple branches and another by a small rural bank with one branch. While SPINNAKER's data tools can't provide a direct answer, they do help in getting us to the first step - asking the right questions.

Wrap Up

Throughout The Philippine Deep Dive, we found that savings mobilization is emerging as an important sector of the Philippine financial system, yet many questions remain as to best practices and client perspectives. As the global savings for the poor landscape develops, it will be molded by innovations in product development, regulatory environment, and technology with opportunities for future research to assess, further expand on, and answer outstanding questions.

We invite viewers to comment on, add to, and even refute the data and analysis laid out here as well as join in the ongoing effort to develop the savings for the poor field by exploring the data pages and the available visualization and comparison tools. You can comment below, or feel free to add questions and conversations to SPINNAKER’s community page.