Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

8150

HOUSE BILL NO.

Introduced by: Hon. HARLIN NEIL J. ABAYON, III

EXPLANATORY NOTE

Automated Teller Machine (ATM) machine withdrawal charges of banks
operating in the Philippines range from P10 to P12.50 per withdrawal. Balance
inquiry charges range from no charge to P2.50. Aside from these, there are other
numerous types of charges for every move a depositor or client makes, including
remittance service charges.

There are 71 banks operating in the country with Bangko Sentral ng
Pilipinas-approved electronic banking facilities and services.

Most recently, in the weekend of July 21-22—just before the latest SONA of
President Duterte, the Land Bank of the Philippines was offline. The Land Bank is
a government bank and depository bank. It is from the Land Bank where our
government employees’ salaries are deposited.

Weeks before that, BDO and the Bank of the Philippine Islands were
inaccessible. These banks and other banks have occasional outages, service
interruptions, and glitches.

When Filipino depositors withdraw and do other transactions, the banks
swiftly execute service charges. However, when these banks are unable to deliver
their most basic ATM services, depositors cannot reciprocate in kind with the
equivalent of service charges.

We, the depositors, simply endure the hardship or inconvenience. Being
unable to pay bills and other payables on time is more than mere inconvenience.


This unfair and unjust situation must not persist. To address it, this bill
empowers depositors and other bank clientele with verified, credible information
and sound metrics on banking performance and services.

By empowering depositors and banking clientele using latest available and
emerging technologies and practices, we enable them to make well-informed
decisions on which bank to patronize, which services to avail of, and most
importantly how to manage their personal and business finances.

This bill tasks the Bangko Sentral, in consultation and collaboration with
stakeholders and eminent subject matter experts, to develop comprehensive and
detailed sets of banking and financial services standards, corresponding objective
indicators, and database of metrics of objective, qualitative and quantitative ratings
on financial inclusion, service quality, and service charges.

These standards shall factor into the regular evaluation of banks, financial
intermediaries, and other financial institutions conducting by the Bangko Sentral
ng Pilipinas in furtherance of its supervision and regulation of these institutions.

This bill also creates the Harmonized Indices of Service Quality and Charges
(HISQC) System as a transparency mechanism to enable consumers to use the
Standards on Financial Inclusion, Service Quality, and Service Charges to
objectively compare, monitor, and rate banking and financial services of different
financial institutions and services providers using computer software, electronic
devices, mobile applications, and other means of telecommunications.

Other salient features of the bill are:

1) | The System shall be administered and operated by the Bangko Sentral, in
coordination and collaboration with the Department of Finance, Department of
Trade and Industry, and the Securities and Exchange Commission.

2) The Bangko Sentral shall design and operate the System to protect
consumers, banks, financial intermediaries, and other financial institutions against
fraud, abuse, malpractice, malfeasance, and other acts that undermine public trust
and confidence of stakeholders in the financial and banking system and institutions.

3) The System shall have a customer feedback mechanism to enable consumers
to directly report to the Bangko Sentral incidents of excessive charges, poor
customer service, and suspicious transactions or activity.

4) The Bangko Sentral shall develop and implement a transparent process for
the management of the customer feedback mechanism.



5) The Governor of the Bangko Sentral shall screen and appoint internal and
external auditors for the System consistent with applicable standards and processes
for such screening and appointment.

6) The Monetary Board of the Bangko Sentral shall promulgate the necessary
implementing guidelines, rules, and regulations to implement within one hundred
and twenty (120) days from the effectivity thereof.

7) _ The Standards on Financial Inclusion, Service Quality, and Service Charges
and the Harmonized Indices of Service Quality and Charges (HISQC) System shall
be operational not later than three hundred sixty (360) days from enactment.

BACKGROUND

The typical Filipino person or small business has a bank account with only
P5,000 or less deposited in any of our country’s banks. Some are more fortunate to
have anywhere from P5,000.01 to P100,000.

In total, the banks had P11.945 trillion worth of deposits in 58.21 billion
accounts of latest available figures (March 2018) of the Philippine Deposit
Insurance Corporation (PDIC).

The biggest chunk of that are small deposits with balances of P5,000 or
lower (P26.85 billion in 36 billion peso accounts).

It is discernable from the PDIC data that the bulk of small to medium-sized
deposits are salaries of employees and cash in bank of small businesses. PDIC
data show there are 47.34 billion bank accounts with deposits of 40,000 or lower.

Interestingly, the next set of clusters are deposits ranging from P40,000.01 to
P100,000 in 3.23 billion accounts. Then there are some Filipinos who are able to
have P100,000.01 to P150,000.00 in 1.28 million peso savings accounts.

As to deposits in foreign currency, usually dollars, there are 942.7 million
foreign currency accounts with deposits wroth P60,000 or lower and these accounts
have, in total, P25.38 billion pesos’ worth of dollars. Some 336 million of those
accounts have P962 million worth of dollars in them.

REFERENCES
inquirer nc/2S4344/
hutp:/news.abs-chn, com/business/06/02/8/bdo-apologizes-for-service-interruption

hup:/www.bsp gov. s/servicefec I



Considering all the foregoing, the swift passage of this bill is sought.

REP. NEIL J. ABAYON, IIT
AANGAT TAYO Party-list

Paoe 4 of 7


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
Third Regular Session
HOUSE BILL NO. J)

Introduced by: Hon. HARLIN NEIL J. ABAYON, III

AN ACT
ESTABLISHING THE PHILIPPINE NATIONAL STANDARDS FOR
BANKING AND FINANCIAL SERVICE CHARGES AND CLIENT
PROTECTION AND WELFARE, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

Section 1. Short Title. - This Act shall be known as the “Financial Services
Inclusion and Protection Act”.

Section 2. Declaration of Policy. - It is the declared policy of the State to:

a) promote a sustained increase in the amount of goods and services
produced by the nation for the benefit of the people and an expanding
productivity as the key to raising the quality of life for all, especially the
underprivileged; and

b) ensure that with the use of property comes the responsibility of rendering
a social function, so that all economic agents shall contribute to the
common good.

Section 3. Standards on Financial Inclusion, Service Quality, and
Service Charges. The Bangko Sentral, in consultation and collaboration with
stakeholders and eminent subject matter experts, shall develop comprehensive and
detailed sets of banking and financial services standards, corresponding objective
indicators, and database of metrics of objective, qualitative and quantitative ratings
on financial inclusion, service quality, and service charges.



These standards shall factor into the regular evaluation of banks, financial
intermediaries, and other financial institutions conducting by the Bangko Sentral
ng Pilipinas in furtherance of its supervision and regulation of these institutions.

Section 4. Harmonized Indices of Service Quality and Charges. The
Harmonized Indices of Service Quality and Charges (HISQC) System, hereinafter
referred to as the System, is hereby created as a transparency mechanism to enable
consumers to use the Standards on Financial Inclusion, Service Quality, and
Service Charges to objectively compare, monitor, and rate banking and financial
services of different financial institutions and services providers using computer
software, electronic devices, mobile applications, and other means of
telecommunications.

The System shall be administered and operated by the Bangko Sentral, in
coordination and collaboration with the Department of Finance, Department of
Trade and Industry, and the Securities and Exchange Commission.

The Bangko Sentral shall design and operate the System to protect
consumers, banks, financial intermediaries, and other financial institutions against
fraud, abuse, malpractice, malfeasance, and other acts that undermine public trust
and confidence of stakeholders in the financial and banking system and institutions.

The System shall have a customer feedback mechanism to enable consumers
to directly report to the Bangko Sentral incidents of excessive charges, poor
customer service, and suspicious transactions or activity.

The Bangko Sentral shall develop and implement a transparent process for
the management of the customer feedback mechanism.

Section 5. Internal and External Audit. The Governor of the Bangko
Sentral shall screen and appoint internal and external auditors for the System
consistent with applicable standards and processes for such screening and
appointment.

Section 6. Implementing Guidelines, Rules, and Regulations. The
Monetary Board of the Bangko Sentral shall promulgate the necessary
implementing guidelines, rules, and regulations to implement this Act within one
hundred and twenty (120) days from the effectivity thereof.

The Standards on Financial Inclusion, Service Quality, and Service Charges
and the Harmonized Indices of Service Quality and Charges (HISQC) System shall


be operational not later than three hundred sixty (360) days from the effectivity of
this Act.

Section 7. Separability. - If any provision or part of this Act is declared
invalid or unconstitutional, the remaining parts or provisions not affected shall
continue to be in full force and effect.

Section 8. Repealing Clause. - All laws, executive orders, and
administrative orders or parts thereof inconsistent with any provision of this Act
are hereby repealed or amended accordingly.

Section 9. Effectivity Clause. - This Act shall take effect fifteen (15) days

after its publication in the online version of the Official Gazette or in two (2)
newspapers of general circulation or with established internet website presence.

Approved.

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