RBAP heaves a sigh of relief over ‘tax on txt’ deferral

Nov. 5, 2009 - PRLog -- The Rural Bankers Association of the Philippines (RBAP), a group consisting of more than 630 rural bank members to date, heaved a sigh of relief after the ways and means committee of the House of Representatives backpedaled and sent the controversial bill that seeks to slap a five-centavo tax on text messages back to the committee for further revision.
“This is most welcome. The issue is not over yet but we hope that lawmakers will eventually reconsider and scrap the bill altogether,” said RBAP President Joseph Omar Andaya.
The House ways and means committee has agreed to revert back to the proposed bill just two weeks after approving it for plenary voting on Sept. 8, apparently feeling the continued heat of public resistance in increasing the cost of texting.
Mr. Andaya said a tax on text would adversely affect rural bank clients, mostly coming from the poor sector of society, as the use of mobile banking through text messages has been on the rise.
“Texting is the cheapest way of electronic communication and it has also emerged as the most convenient way to avail of banking services because they can do it wherever they are without incurring the usual travel costs and hassle when going to the bank,” he added. “Making the cost of texting higher because of this bill will severely limit their access to banking services. The service providers have already indicated that any additional tax will be passed on to the consumer.”
Through a partnership between RBAP and Globe Telecom, Inc.’s G-Cash, rural bank clients get access to different mobile phone banking services from anywhere they are, including high conflict areas, just by using their cellphone.
Among the mobile phone banking services available include Text-A-Payment, Text-A-Remittance, Text-A-Deposit, Text-A-Withdrawal, Text-A-BillPay, and Text-A-Sweldo.
By providing mobile phone banking services, rural banks are encouraging development in rural areas through these different services and also providing easy access to banking services to the underserved rural community and the small and medium enterprises in far flung areas of the country.
“Additional levies on texting cost would discourage, instead of encourage, business and expansion of financial services in the rural areas,” Mr. Andaya pointed out.
Text-A-Payment is most especially helpful for rural banks clients which have availed of microfinance services of rural banks. This service allows microborrowers to make microfinance loan payments. New, existing and repeat borrowers can use the service for payments of their loans.
Rural bank clients only need to enroll at their bank branch, register their mobile phone with Globe’s G-CASH service, and then easily load their mobile wallet at any G-CASH Cash-In center or re-seller. After completing these steps, bank clients can conveniently and remotely send their loan payment to the bank without incurring the time and expense associated with traveling to a rural bank to make a loan payment. Loan borrowers can pay the loan without their respective businesses.
A Text-A-Credit service, which will allow banks to release loans through their clients' mobile phone wallets and wherein banks may also allow pre-approved credit lines for their preferred clients, is currently under development.    
Mobile phone penetration rate in the Philippines hit 75 percent as of end-2008, as the number of subscriber identity module, or SIM cards, sold by the country’s top three operators reached 67.9 million.  There are currently over 80,000 users of mobile banking services, and this number is still on the rise.
Globe Telecom said it had a total subscriber base of 24.7 million, including both Globe and Touch Mobile subscribers, as of December 2008.
On the other hand, the PLDT group said it had 35.2 million subscribers as of December 2008, including 20.9 million Smart Communications subscribers and 14.3 million Talk ’N Text subscribers.
Meanwhile, the third player in the mobile phone industry, Digital Telecommunications of the Gokongwei group, said it had more than eight million subscribers under its Sun Cellular network during the same period.

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