Philippines increases MBO deposit limits by 63%

Move intends to help promote financial inclusion in rural areas.

The Rural Bankers Association of the Philippines said this initiative by the Bangko Sentral ng Pilipinas, the central bank, to increase the deposit limits of micro-banking offices (MBOs) will give rural depositors greater flexibility in saving their cash.

RBAP said the move will also eventually create an urgent push for economic development in the Philippine countryside.

BSP increased the limit on microfinance deposits from P15,000 to P40,000 to give local banks flexibility to serve low-income earners in the country.

Under BSP Circular 694, depositors in MBOs are also allowed to open micro-deposit accounts with less than P100 as maintaining balance and avail of micro-credit for personal and business purposes.

This will give farmers, fishermen, micro-entrepreneurs and other depositors in rural communities a greater opportunity to save money through MBOs.

Many rural and thrift banks have MBOs, especially those in cities and municipalities where microfinance-oriented banking services are unavailable.

Around 37% of the 1,635 cities and municipalities in the Philippines do not have a single banking office, BSP said.