LandBank seen to further expand prepaid card system for CCT

State-owned Land Bank of the Philippines (LandBank) eyes the rapid adoption of its antifraud prepaid card product it has cobranded with the electronic money, or e-money, issuer OmniPay Inc. OmniPay Inc. President and CEO Simon Ung said the prepaid cards have proven very useful in deploying funds set aside for the government’s Pantawid Pamilyang Pilipino Program,  or the 4Ps.

He said with over Php50-billion cash grants already disbursed by the bank, he expects a rapid migration to prepaid cards over the next 18 months. He said the number of beneficiaries and households under the 4Ps already total 5 million and covers over 41,000 barangays.

LandBank First Vice President and Card and Electronic Banking Group Head Randolph Montesa said the cash cards can be used in over 17,000 BancNet automated teller machines (ATMs), including more than 1,400 LandBank ATMs.

LandBank has contracted additional payment service providers for areas with no available ATMs.

“LandBank supplies the most payment instrument, via cash cards, being the primary payment service provider of the Conditional Cash-Transfer (CCT) Program,” he said at the recent Asia Pacific Financial Inclusion Summit 2015 organized by the Financial Times business magazine.

Montesa said of the total Php17.752-billion education and health grants distributed from January to June 2015, 44.83 percent of the amount was made via LandBank’s cash cards, while 55.17 percent was through cash disbursements.

According to the Department of Social Welfare and Development, the budget allocated for the 4Ps this year amounted to Php62 billion.

Some of the challenges in cash disbursements include security and cost issues, especially when transporting cash to remote areas. “There’s the challenge in maintaining the proper levels of liquidity. It’s tedious because recipients have to present acknowledgment receipts to get their money over-the-counter,” he said.

Also, the system uses more than 2 million sheets of paper at each pay period. He also said LandBank prepaid cards serve as an ID card and can be used as payment tools in more than 100,000 point-of-sale terminals.

“By 2018 LandBank will be the top universal bank that promotes inclusive growth and improves the quality of life especially in the countryside through the delivery of innovative financial and other services in all provinces, cities and municipalities,” Montesa said.

For the first nine months, the bank posted net income of Php10.27 billion, 11 percent higher than income of only Php9.26 billion in the same period in 2014. It also exceeded its third-quarter net income target of Php9 billion by 14 percent.

LandBank President and CEO Gilda E. Pico is confident the bank would surpass its 2015 net income target, seen driven by the robust growth in its lending and investments businesses.

“We hope to finish 2015 strong with greater focus on strengthening our core business segments and assisting our mandated and priority sectors. Our efforts are geared toward contributing to the government’s goal of promoting sustainable development and financial inclusion, bringing financial services to underserved and unbanked areas,” Pico said.

LandBank has a distribution network of 357branches and 1,466 ATMs, as of end-October 2015.