PH’s financial inclusion ranking dips – report
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Wed, 18 Dec 2019 16:17:14 +0000
DESPITE the government’s recognized efforts to improve it, the Philippines’ financial inclusion ranking dipped in the latest report of The Economist Group’s research arm.
In its “Global Microscope 2019” report, the group’s Economist Intelligence Unit said the Philippines scored 71 out of 100 — same as India’s — one notch lower than last year’s 72. This put the country in fifth place among the 55 economies reviewed.
Colombia topped the list, followed by Peru, Uruguay and Mexico.
The report acknowledged the Philippines’ effort to improve financial inclusion, citing the institutionalization of the Financial Inclusion Steering Committee — the governing body that provides strategic direction, guidance and oversight in the implementation of the National Strategy for Financial Inclusion — in 2016.
“The Philippines has increased its focus on digital financial inclusion, with the launch of a biometric national identification system and a program to provide a one-stop shop for online government services,” the report said.
However, it believes that while efforts are being made to increase financial and digital literacy, they lack gender goals.
The report also lauded the Bangko Sentral ng Pilipinas (BSP) by creating a support institution to focus on digital financial technology to reach the underserved.
But “interoperability in retail payments is still constrained by a limited number of participating institutions and high transaction costs,” it said.
“The supervision of non-banks and MFIs (microfinance institutions) needs strengthening, as do dispute resolution mechanisms for government payments,” it added.
Despite the drop in the country’s ranking, the BSP emphasized that the Philippines remained one of the top countries promoting financial inclusion.
It said the country continued its exceptional performance in the report’s five standard categories: government stability and support; stability and integrity; products and outlets; consumer protection; and infrastructure.
The country also retained its top standing in credit portfolios for middle- and low-income customers, market entry and ongoing requirements for banks.
Addressing the challenges to financial inclusion cited by the report, the central bank said “legal and regulatory efforts have been made to bolster consumer protection mechanisms and safeguard public welfare.”
“The findings of the ‘Global Microscope 2019’ were positive overall, owing to the improved global enabling environment for financial inclusion,” it added.
A leading publication on financial inclusion, the Global Microscope is a yearly assessment of 55 countries on their respective initiatives and provides information on global trends and issues in financial inclusion.
Iterations of the report from 2009 to 2013 examined the microfinance business environment of countries, while iterations from 2014 onward were expanded to assess the overall regulatory environment for financial inclusion.
This year’s report also added 11 new indicators related to gender development, particularly women’s access to financial services.