While financial regulators and institutions all clamor to achieve a higher level of financial inclusion in the country, the Bangko Sentral ng Pilipinas (BSP), along with the Bank for International Settlements (BIS), said necessary measures should not be rushed to maximize the benefits of financial access to all.
In its maiden research conference in Cebu, the central bank and the BIS discussed issues on financial inclusion and their impact on central banking.
The conference was an initiative of BSP Governor Amando M. Tetangco Jr. in his capacity as chairman of the Asian Consultative Council (ACC).
“There has been considerable focus on financial inclusion in several forums but we could benefit from a focused discussion on its linkages with financial stability and other key issues,” Tetangco said.
Tetangco said in a media briefing that financial regulators must have the capacity to keep up with the rapid rise of financial inclusion in respective jurisdictions, as broader financial access causes shifts in market behavior.
“Never overlook the risk aspects of finance,” Tetangco said.
In particular, the governor cited the need for greater cooperation among regulators to establish a stronger payments system in the country.
The governor also said financial literacy and ample vigilance in safeguarding the system must be in place to ensure efficient services to those who have access to financial platforms in the country.
Financial inclusion has gained prominence as a global policy agenda, as it complements other policy initiatives on reducing poverty, addressing inequality, and promoting financial stability and integrity.
“This is a very important area for the Philippines. While the Philippines is enjoying early gains from its initiatives in microfinance and mobile financial services, access to financial products and services remains a challenge,” the central bank said.
Latest data from the BSP show 36.4 percent of the country’s municipalities remain unbanked; and, while 43.2 percent of Filipinos save, 68.3 percent of them put savings at home.
Also, while 47.1 percent of Filipinos have loans, 72 percent of those who borrow money get it from informal sources, like family and friends.
The same challenge is being faced by small and medium enterprises (SMEs), where only 30.5 percent of them have a credit line from a bank.
“Increasing access and effective usage of financial products and services ensure that individuals, households and firms can be productive economic agents toward inclusive growth,” the central bank said.
Just recently, the BSP led the crafting of the National Strategy for Financial Inclusion, together with 12 other government agencies to coordinate financial inclusion efforts in the country.