When opening a bank account in the Philippines, you will need at least two valid IDs to prove your existence and identity before you will be accepted. Unfortunately, 14% of the population is not able to present these files, even though there are 25 different recognized valid ID systems. How come and what is the government doing to change this?
What ID do you need?
When you’re born, your parents receive a birth certificate. When you register to vote, you get your voter’s ID. When you pass your driver’s license test, you apply for your driver’s license. But to obtain this license, you will have to present a valid ID. These are three of the 25 valid ID systems in the Philippines. Some of them you acquire by occasions, others you apply for. Half of these ID systems are paper-based, some have a picture, others don’t. Some require a high payment to obtain them, others don’t, and so on. In other words, getting a valid ID in the Philippines seems easy, owning the right ones might be a bit more difficult. Let me explain to you exactly what the problem is.
Lack of documentation
The Philippines has no general valid ID. Instead, there is a list of 25 different kinds of functional ID systems. To benefit many public and private transactions, one or multiple valid ID cards are necessary.
Many people lose their birth certificate or do not own other valid ID systems and therefore lack documentation. Because they do not possess these documents, they cannot apply for financial services and are excluded from many public and private services. According to a study from the World Bank’s ID for Development group, 14% of Filipinos (15.123.523 Filipinos) are denied of government and other financial services because of this. This causes even bigger financial illiteracy and marginalization of the poor.
The Artisans at rags2Riches
The artisans at Rags2Riches are part of that 14% which means they have no possibility to open up a bank or savings account. To help them grow financially, Rags2Riches wants to teach them financial literacy, so that they can be independent in the long run and prepared for big investments or emergencies. Unfortunately, the artisans were not allowed to open a savings account, because many lost their birth certificate due to fire or damage or they had not enough documentation. Thanks to a partnership with Card Bank, Rags2Riches was able to open a savings account for every artisan and employee.
How about the others?
Unfortunately, not all people are lucky enough to have help to have access to financial services. The Filipino government has been talking about a general ID for years, but the bill never passed. Due to worries about privacy, the government was never able to form a law creating one valid government-issued ID.
On August 6, 2018, President Rodrigo Duterte signed into law the bill that will establish a national ID system, called PhilSys. Once this happens, there will be only one valid ID for all Filipinos. Therefore Filipinos will only need to show that ID card upon request of ID and will have sufficient proof of identity. By creating this national ID system, public and private services will become more accessible and efficient. Besides improving services, the government also aims to fight corruption, prevent fraud and make doing business in the Philippines easier.
To set up the system, all citizens and resident aliens will have to register one year after the law takes effect. Once registered, the person will get a Philsys number and a physical Identification card with a chip that contains all basic information. All people born after the law takes effect will immediately be registered when born.