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Bangko Sentral ng Pilipinas to implement digital finance ecosystem to address Filipino issues on financial inclusion

Bangko Sentral ng Pilipinas to implement digital finance ecosystem to address Filipino issues on financial inclusion

An estimated 15.8 million Filipino adults
own an account according to the 2017 Financial
Inclusion Survey
(FIS) conducted by the Bangko Sentral ng Pilipinas (BSP). The
number represents ¼ of the total adult population in the country, which is
defined as individuals aged 15 and above.

According to the announcement
released by the BSP, the FIS is a nationally representative survey dedicated to
collect financial inclusion data from the perspective of Filipino adults. It is
the second run of the national survey with the baseline conducted in 2015. A
basic indicator of financial inclusion is ownership of an account that can be
used to save money, receive salary, send or receive remittance, and pay bills.

Banks continue to have a higher share
(11.5%) in account penetration than non-banks such as microfinance
non-government organizations (8.1%), cooperatives (2.9%), and non-stock savings
and loan associations (0.3%). Only 1.3% of adults have an electronic money
(e-money) account.

Out of the 52.8 million adults who do not
have an account, 60% cited not having enough money as the main reason. 21%
reasoned lack of need while 18% was due to absence of documentary requirements.
Other reasons mentioned are high cost (10%), lack of knowledge in account
opening (9%), lack of work (8%), and lack of awareness (8%).

Information concerning women’s financial
inclusion was also gathered from the survey. It said that women’s financial
inclusion is positively demonstrated across different financial products and
services. Although bank and e-money account penetration is slightly higher for
men, women are twice likely to have an account than men in general.

Institutions such as microfinance NGOs and
cooperatives drive the gender gap that favoured women. The Philippines presents
an interesting case wherein the level of financial inclusion is significantly
higher among women than men, compared to most developing countries that face
the persistent challenge of financial exclusion for women.

There are opportunities for greater
financial inclusion enabled by digital technology. According to data, accounts remain
underutilised for payment and remittance transactions. Among account owners,
only 18% are receiving salary, 12% are sending/receiving money, and 6% are receiving
pension. Nearly 9 out of 10 adults have payment transactions, where 60% are still
paying in cash.

Remittance transactions are done over the counter
as 93% used remittance agents in sending money while 83% used them for
receiving money in the past six months. Digitising these payment and remittance
transactions is a crucial step towards digital financial inclusion.

The survey showed ways to improve existing
services as well as the issues that need to be tackled in order to increase the
adoption of electronic payments. 70% of the adults cited convenience as the top
consideration for choosing a channel for payment and remittance. Most senders
and recipients of money mentioned cheaper charges, more physical access points,
and faster services as the best ways to improve fund transfer services.

Among the issues that need to be addressed
for automated teller machines (ATM) are concerns on availability, trust, and
distance. For electronic platforms such as internet and mobile banking, the
issues are lack of awareness and lack of connectivity. Around 46% of account
holders who have access to the internet are ambivalent about e-payments due to
issues such as hacking, personal security breaches, and unsafe access.

The National Retail Payment System (NRSP)
is the response of BSP to the aforementioned issues. It is BSP’s flagship
program for digital finance that supports the diverse needs of all users in a
manner that is secure, sustainable, convenient, and affordable.  

Moreover, the BSP has also issued regulations to
democratise access to an account through the basic deposit account. BSP will
also create an expansive network of low-cost touch points through branch-lite
units and cash agents, together with other key policy issuances and initiatives
to promote digital finance.

PARTNER

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CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

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SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

PARTNER

HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

PARTNER

IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

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