The Power of Savings – Rural Miners Open their First Savings Accounts

By Meliza H. Agabin, RBAP-MABS Deputy Chief of Party

Cantilan Bank Tubod BranchFrom Butuan City going north towards Surigao Norte is the town of Tubod, where mining has become a major source of employment to local residents and those in the outlying towns. Hired by labor sub-contractors of the mining company there, the number of miner-laborers peaks during the dry season and declines during the rainy season. The mining site is about five kilometers away from the Cantilan Bank Tubod Branch, which started its operations in 2005.

As is the practice in the mining industry, mining companies operating in Surigao del Norte and Surigao del Sur outsource their labor requirements to sub-contractors. In some cases, the laborers generally come from outside the local towns. In the case of the mining company in Tubod, more than 50% of the laborers are local residents who work as “casual” laborers in the mine. Since the work is only temporary, there are times when these laborers are out of work, especially during the rainy season.

Saving for the rainy day. This was in the mind of Cantilan Bank Tubod branch head Albino Duero when he thought of offering a special contractual savings product for rural miners. He broached the idea to the management of a sub-contracting firm and the latter agreed. The firm’s management also seeded each of the newly opened deposit accounts with PhP100 (US$2.30), the minimum amount to open an account. Even the miners liked the idea when the bank staff explained the savings scheme to them.

Tubod minerThe firm hires up to 200-300 miners during the dry season, and less than a hundred during the rainy season. Since June 2010, Tubod branch has been providing payroll services for the salaries of these miners. Since the miners receive their salary through their savings account, they are encouraged to set up auto-debit, leaving at least P100 of their bi-monthly salary as savings.

Deposit balances, according to Mr. Duero, average around PhP1000, with some miners having as much as P7000. There are no restrictions on withdrawals, except for maintaining at least PhP500 if they want to continue to earn interest on their savings. When their contract with the mining subcontractor ends permanently or temporarily, they are allowed to withdraw as much of their savings except for the P100 seed money from the company.  Most tend to keep their savings accounts active with the bank.

Tubod branch head is looking at the potential of having the laborers use mobile phone banking to be able to withdraw (text-a-withdrawal) or deposit (text-a-deposit) money into their account. Two GCASH accredited merchant partners in Tubod were recruited by Cantilan Bank Tubod branch to serve as cash in/cash out points.

One partner, Paje Store, is a depositor of Cantilan Bank Tubod branch. One of the biggest stores in the municipality, Paje Store sells hardware, dry goods, school supplies, shoes and the like. It is about 100 meters away from the branch and serves to complement the cash in/cash out services of the bank during weekends and after banking hours.

ecashThe other CICO outlet is an airline ticketing agent, Travel eCash. A good 300 meters away from the branch, its owner receives e-money payments for ticket purchases from buyers as far away as Manila. She was encouraged by the bank to become a CICO and then become a merchant-partner of Cantilan Bank about a year ago.  She was initially not too keen about become a CICO until she saw the potential for accepting m-money payments for airline tickets. In the local area, most of the transactions that go through the merchant partners are for small cash out transactions. She is also a depositor of Cantilan Bank’s Tubod branch.

Under the channel management project initiative of the USAID-supported RBAP-MABS Program, participating rural banks are gearing up to reach more Filipinos that don’t have savings account. The program is also working to promote the use of mobile phone banking services via mobile money platforms to support greater access to deposits and other banking services.