THE Department of Finance (DOF) has sought the assistance of the International Finance Corp. (IFC) anew in line with applying financial technologies (fintech) in the further development of the Overseas Filipino Bank (OFB).
In a recent meeting with IFC officials, Finance Secretary Carlos G. Dominguez III outlined the government’s plan to apply fintech in organizing the Philippines’s first OFB that caters to its citizens overseas, by converting it into a fully digital bank using mobile technologies rather than having physical branches to serve its clients.
Dominguez underscored the need to put in place a liberal regulatory environment to enable fintechs, which are seen to help Filipinos ride the digital wave. He added that new fintechs are crucial for the government to achieve President Duterte’s goal of financial inclusion.
“Let’s not choke it with regulations. Let them grow, make mistakes. Then we learn how to regulate them,” Dominguez said. The 2017 Financial Inclusion Survey of the Bangko Sentral ng Pilipinas showed that only 22.6 percent of the total adult population in the country, or about 15.8 million Filipinos, have bank accounts, leaving the majority of 52.8 million unbanked.
Led by its CEO Philippe Le Houérou, the IFC assured Dominguez that the institution will support the government’s efforts in attaining financial inclusion through the use of digital technologies.
“We are with you, to improve the way we work together on fintech, and more broadly, financial inclusion,” Le Houérou said.
During the meeting, Dominguez also asked the IFC for assistance in identifying and developing new industries to help transition workers in the country’s dollar-generating information technology-business process outsourcing (IT-BPO) industry to new jobs, expressing concern over the emerging threats of the Fourth Industrial Revolution.
“Our threat is not really from India, but from the rapid changes in technology,” Dominguez added.
He said the IT-BPO sector earns about $30 billion a year in revenues and employs around 1.2 million Filipinos.
Then DOF chief also discussed with the IFC ways to institute reforms in the Technical Education and Skills Development Authority (Tesda), so it can refocus its efforts in training workers to make them employable in the emerging digital economy. He also broached the possibility of installing a solar power plant in New Clark City in Pampanga using green bonds as a financing option after Le Houérou briefly discussed the World Bank’s “Scaling Solar” program —a one-stop shop of services aiming to create viable markets for solar power through privately funded grid-connected solar projects.
Other IFC officials at the meeting were Vivek Pathak, regional director for East Asia and Pacific; Jane Xu, country manager for the Philippines; Val Bagatsing, principal investment officer, East Asia and Pacific; and Nicolas Marquier, adviser to the CEO.
Mara Warwick, World Bank country director for the Philippines, Thailand, Malaysia and Brunei Darussalam was also in attendance.
The OFB was inaugurated at the Postbank Center in Manila by the President on January 17, 2018.
Last year, the DOF pointed out that around 10 million overseas Filipino workers could be the initial beneficiaries of the technological leapfrog envisioned for the OFB, which aims to transform the way Filipinos buy, receive, sell and distribute goods and services.