The Philippines remains as one of the top countries promoting financial inclusion, ranking fifth worldwide and first in Asia along with India based on results of the Global Microscope 2019 published by the Economist Intelligence Unit (EIU), the research arm of The Economist Group.
The Philippines continued its exceptional performance in the report's five standard categories, which consist of government stability and support; stability and integrity; products and outlets; consumer protection; and infrastructure. The country also retained its top standing in credit portfolios for middle- and low-income customers, market entry, and ongoing requirements for banks.
Focusing on the enabling environment and expansion of digital financial services (DFS), the Global Microscope 2019 recognized the country's recent efforts in promoting digital financial inclusion and financial literacy. The report cited the continued implementation of the National Strategy for Financial Inclusion (NSFI) under the guidance of the inter-agency Financial Inclusion Steering Committee (FISC). It highlighted recent initiatives, among them the launch of the national digital ID system, one-stop shop program for online government services, and creation of the Bangko Sentral ng Pilipinas (BSP) of the Financial Technology Sub-Sector (FTSS), a supporting unit oriented towards digital financial technology for the underserved.
The report also cited areas for further development for the Philippines, in which efforts are already being made to address concerns specifically posed by cyber-security, connectivity, and frameworks for emerging services. It noted that interoperability in retail payments remains hindered by limited industry participation and transaction costs. The supervision of microfinance institutions (MFIs) and non-banks, and dispute resolution mechanisms for government payments likewise require enhancement. While it is one of only four countries where women have better access to DFS than men, the report noted that Philippines lacks gender-based goals according to the report. Legal and regulatory efforts have been made to bolster consumer protection mechanisms and safeguard public welfare in response to these challenges.
The findings of the Global Microscope 2019 were positive overall, owing to the improved global enabling environment for financial inclusion. Countries have been increasingly integrating digital approaches alongside the implementation of financial inclusion strategies. The increased adoption of relevant frameworks would encourage the entry of more innovators and external players such as fintechs. The results of the Global Microscope will continue to inform the BSP's efforts towards achieving financial inclusion and its vision of bringing itself closer to the people.
A leading publication on financial inclusion, the Global Microscope is a yearly assessment of 55 countries on their respective initiatives and provides information on global trends and issues in financial inclusion. Iterations of the report from 2009 to 2013 assessed on the microfinance business environment of countries while iterations from 2014 have expanded to assess the overall regulatory environment for financial inclusion. In addition to focusing on digital financial inclusion, the Global Microscope's latest edition features the addition of 11 new indicators related to gender development, particularly women's access to financial services.
Source: Bangko Sentral ng Pilipinas (BSP)