Accelerating PH financial inclusion
Financial Inclusion is defined as “a state wherein there is effective access to a wide range of financial services for all, especially the vulnerable”. Last week, BSP Director Ellen Joyce Suficiencia of the Financial Inclusion Group-Center for Learning and Inclusion Advocacy, presented the updated 2022-2028 Six-Year National Strategy for Financial Inclusion (NSFI) to the Financial Executives Financial Inclusion Committee (FINEX FIC) chaired by Gay Santos, Regional Director of Water Org. FIC Chair Gay said that FINEX FIC’s mission is to increase awareness on the importance of inclusion and instill the mindset that inclusion is beyond Corporate Social Responsibility (CSR) among the key decision makers, shakers and influencers in the public and private sector.
On the NSFI, Director Joyce explained the key ideas of financial inclusion, why it matters, the expanded version of the national strategy which doesn’t focus only on financial products but now expanded to include digital inclusion, MSME and agriculture, financial education, social protection, health and resilience. She explained that financial inclusion is important because:
- Financial services are tools that help Filipinos achieve their life aspirations and financial goals;
- For businesses and MSMEs, financial services improve productivity and competitiveness and thus improve livelihood opportunities for the community;
- Financial inclusion supports inclusive and sustainable economic growth;
- Covid-19 and climate change highlighted the need for access to resilience building tool.
In 2019, 29% of adult Filipinos had formal bank accounts, up from 23% in 2017. This means seven out of ten adult Filipinos still don’t have any. Why? Reasons cited are: lack of money (45%), intimidated by banks formal look (31%), lack of documents (26%), distance to banks (8%).
The 2022-2028 (NSFI) will serve as the blueprint to achieve the vision of driving financial inclusion toward broad based financial growth and national resiliency:
- Promote inclusive digital finance.
Reduce disparities in financial inclusion across demographic attributes age, gender etc. The share of digital payments totals in retail payments transactions doubled to 20%in 2020 from 10% in 2018. The national ID system PhilSys is ongoing, to address the lack of identity document as a barrier to account opening.
- Strengthen Financial education and consumer protection.
More financially capable and empowered consumers. Level of financial literacy. Usage of digital financial services among mobile users.
We commend highly, Joey Concepcion’s Go Negosyo MentorMe program and the Financial Literacy Education program of FINEX Foundation headed by three passionate ladies Chit Manabat, Menchu Serina and Norma Villaruz.
- Enhance access to risk protection and sound safety nets.
Result in improved financial health and resiliency. Some financial health indicators are savings of at least P10K, insurance coverage penetration.
- Enhance agriculture and MSME financing ecosystem.
Increase access to finance and enhanced guarantees support for MSMEs and agricultural loans.
Expanded working groups to include government and private sector are now being formed to start off the NSFI 2022-2028 Strategy Governance Framework, as follows: Digital Finance; Data and Monitoring; Financial Literacy and Consumer Protection, Agriculture, MSME, Startup Finance; Risk Protection & Safety; and Communications (public awareness programs).FINEX, FINEX Foundation, Water.Org are among the private sector included.
Financial inclusion is not an end but a means to achieve broader aspirations, to provide access to financial services that enhance financial health such as the ability to meet financial obligations, recover from financial setbacks, achieve long term goals and be able to have control over finances. With Financial Inclusion more urgent and pressing now.Let’s all do our part.
Angat Lahat!
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Ms. Tarriela was the first Chairwoman of the Philippine National Bank. She is a former Undersecretary of Finance and the first Filipina vice-president of Citibank N.A. She is a trustee of FINEX and an Institute of Corporate Directors fellow.
(The views expressed herein do not necessarily reflect the opinion of these institutions.