News

Banks in Philippines blame cap on fees for dwindling number of ATMs in country

People line up and get cash from ATMs at a commercial center in Antipolo City, Philippines in May. Photo: iStock

November 25, 2019

Last week, the central bank of the Philippines threw out a proposal to cap ATM fees, saying that the cap could lead to a further reduction in the number of ATMs throughout the country, particularly in rural areas, which would run counter to the Bangko Sentral ng Pilipinas's goals for financial inclusion. 

A moratorium on ATM fees was initially imposed in the country in 2013, but it was lifted earlier this year. Now, according to a report by the Inquirer, the country's largest banks believe a cap on fees has led to a dwindling number of cash machines in the country.

The Bankers Association of the Philippines, which represents the country's 42 commercial banks, reported that ATM density in the Philippines is significantly less than that of other Asian countries. This is mainly due to banks having to cover the costs of keeping the machines up and running. 

"The number of cardholders has been increasing for the past six years," Benjamin Castillo, BAP's managing director, said in the report. "Banks need to keep up with the maintenance and innovation of ATMs, as well as expansion of ATM networks to accommodate the surge of ATM usage."

According to the banker's group, the Philippines has 21,000 ATMs servicing 58 million cardholders — that's 20 ATMs per 100,000 cardholders. In contrast, Thailand has 94 ATMs per 100,000 cardholders, Singapore has 49, Malaysia has 45 and Indonesia has 40.

Annual growth rate in ATM deployments in the Philippines averaged 13% prior to 2013, but since then declined to 6.4%, while ATM transaction volume continued to increase from 2014 up to the present, the report said. 

If banks want to adjust their ATM transaction fees, they have to apply with the BSP, which sent out a memo in July reminding banks to keep fees reasonable.

"We would like to assure the banking public of our commitment to serving them," Castillo said, adding that the BAP will work will regulators to ensure that ATM fees remain market-driven and reasonable.