Assistance from an international financial institution has been sought by the Department of Finance (DOF) in line with the further development of the Overseas Filipino Bank (OFB).
According to a recent report, the DOF Secretary outlined the government’s plan to apply financial technology (fintech) in organising the Philippines’ first OFB that caters to citizens overseas.
This can be achieved by converting it into a fully digital bank using mobile technologies instead of having physical branches to serve its clients.
Department Secretary Dominguez highlighted the need to put in place a liberal regulatory environment to enable the fintechs, which are seen to help Filipinos ride the digital wave.
New fintechs are crucial for the government to achieve the financial inclusion goal of President Duterte.
New fintech should not be choked with regulations, according to him. Allow them to grow and make mistakes. Then the government will learn how to regulate them.
The 2017 Financial Inclusion Survey of the Bangko Sentral ng Pilipinas showed that only 22.6% of the total adult population in the country, or about 15.8 million Filipinos, have bank accounts.
This leaves the majority of 52.8 million unbanked.
The international financial institution gave an assurance of their support to the government’s efforts in attaining financial inclusion through the use of digital technologies.
The institution will work together with the Department on fintech, and more broadly, on financial inclusion.
Moreover, further assistance from the institution was requested by the Secretary during their recent meeting.
First of which is for 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.
The IT-BPO sector earns about US$ 30 billion a year in revenues and employs around 1.2 million Filipinos.
The second request is for ways to institute reforms in the Technical Education and Skills Development Authority (TESDA).
This will help TESDA refocus its efforts in training workers to make them employable in the emerging digital economy.
The third is on the possibility of installing a solar power plant in New Clark City in Pampanga using green bonds as a financing option after the institution’s CEO discussed the program of its sister organisation called the “Scaling Solar” program.
The Scaling Solar program is a one-stop shop of services aiming to create viable markets for solar power through privately funded grid-connected solar projects.
10 million overseas Filipino workers are the possible initial beneficiaries of the technological leapfrog envisioned for the Overseas Filipino Bank, according to the Department last year.
This technological leapfrog that they have envisioned aims to transform the way Filipinos buy, receive, sell and distribute goods and services.