BSP Financial Inclusion Accomplishments in 2016

The Bangko Sentral ng Pilipinas (BSP) recently released its year-end report showcasing milestones and achievements in promoting financial inclusion in 2016.

As the appointed chair and secretariat of the Financial Inclusion Steering Committee (FISC) under Executive Order No. 208 2016¹, the BSP continued to lead the implementation of the National Strategy for Financial Inclusion (NSFI). The 15 FISC agencies including the BSP carried out specific policies and programs, as committed in their own NSFI Tactical Plans. Following the exposure of these plans to key stakeholders, public-private sector partnerships were forged to implement projects under the NSFI umbrella. Donor agencies like World Bank and Asian Development Bank have committed resources to support NSFI objectives. A measurement and evaluation system is being developed to facilitate monitoring and reporting of NSFI outcomes.

The BSP continued to pursue financial inclusion thru various initiatives classified under the areas of (1) policy and regulation, (2) financial education and consumer protection, (3) data and measurement, and (4) advocacy programs.

Notable in 2016 was the issuance of regulations that promote greater access to finance for agricultural workers and actors participating in agri value chains, as well as microdepositors and microfinance clients.² The BSP also continued to lay the groundwork for the National Retail Payment System, a policy framework envisioned to enable retail payment transactions from any account to any account thru inter-operable electronic channels. Policy research on fintech innovations were also undertaken in view of potential benefits for financial inclusion, balanced with deeper understanding of risks posed to consumers, providers and the financial system.

The enabling policy and regulatory environment has yielded positive results. The number of unbanked municipalities continued to drop in 2016, following the establishment of micro-banking offices (MBOs) which have reached 405 cities and municipalities, 77 of which are served by MBOs alone. Microfinance banks have also empowered the low-income population to save, many of them for the first time. As of Third Quarter 2016, there were 3.4 million micro-deposit accounts amounting to PhP 6.7 billion.

The BSP sustained implementation of its Economic and Financial Learning Program which has already reached a total of 55,000 participants nationwide; refined consumer protection regulations; and enhanced its complaints management system. These activities aim to protect the welfare of consumers and promote a financially-learned citizenry who can better take advantage of opportunities that financial inclusion brings. The BSP also continued its financial inclusion advocacy programs to raise public awareness and generate greater support for financial inclusion.

The above initiatives are building blocks that lay the foundation of a more inclusive financial system. These were among the factors considered by the Economist Intelligence Unit in retaining the Philippines’ ranking as first country in Asia and third in the world with the most conducive environment for financial inclusion.³ The country was also cited by the Brookings Institution as most improved in terms of digital and financial inclusion over the past year.⁴ Moving forward, the BSP will intensify efforts to achieve financial inclusion objectives.

For more information, the 2016 BSP Financial Inclusion Report may be downloaded here. ●