BSP advisory on saving money in banks has always rung hollow

The editorial “Saving for the lean days” (9/6/21) wrote about the magnanimity of the Bangko Sentral ng Pilipinas (BSP) in exchanging with equivalent good money the termite-infested cash a delivery man had kept at home for years. The editorial noted: “The central bank saw in the incident an opportunity to remind the public about the risks of keeping one’s hard-earned money at home … and for the public to keep their savings in BSP-supervised financial institutions where they will be safe and secure.”

Such BSP advisory has always rung hollow in light of the fact that savings in banks earn interest at the whopping rate of 0.10 or 0.12 percent per annum! Thus, for every P10,000 deposited in a bank, the depositor earns only P10 or P10.20 per year — less tax. But when banks lend their depositors’ money to the public, the BSP allows them to charge interest from 18 percent to 28 per annum. By any measure of fairness, depositors are being screwed. Small wonder the major players in the banking system are raking it all in and have become multimillionaires, if not multibillionaires. And pray tell, why is the government limiting the insurance cover of the depositors’ savings to only P500,000 per account—as if to play safe in the likelihood that the banks mess up and the BSP misses the red flags? Some reassurance, indeed.

There was a time when a popular bank gave its depositors a breakthrough annual interest of 10 to 12 percent per annum on their savings. It was generally believed to be a fair deal as it was in sync with prevailing jurisprudence. No less than the Supreme Court had allowed interest payment then at 12 percent per annum (Crismina Garments v. CA, March 9, 1999). Then a cabal of banking nabobs ganged up on that bank, which they saw as “stealing” their depositors and attracting new ones in droves. It was causing the money-grubbers sleepless nights. The central bank (now BSP) stepped in and eviscerated that bank in 2011, much to the consternation of millions of satisfied depositors all over the country who could not help wondering who the bank regulators were working for.

BSP officials are among the highest-paid “public servants” in the country, earning salaries, allowances, bonuses, incentives, etc., and enjoying countless perks and privileges amounting to millions, not per year, but per month—all courtesy of taxpayers. One would think their loyalty would be to the taxpayers, most of whom are also bank depositors. Alas, it seems their overriding concern is to make the banking industry “viable”—that is, more profitable to the bank owners and their stockholders, the cash-strapped public be damned.

STEPHEN L. MONSANTO
[email protected]