ADB approves $300-M financial inclusion loan

By: ManilaTimes
Source: manilatimes

THE Asian Development Bank (ADB) has approved a $300-million loan in support of the Philippines’s financial inclusion efforts.

“Through this loan, ADB is expanding its partnership with the Philippines in ensuring all Filipinos will have access to financial products and services, including via digital platforms, to help improve their lives and livelihoods,” ADB senior financial sector specialist Kelly Hattel said on Thursday.

The Manila-based lending institution’s Inclusive Finance Development Program, Subprogram 3 loan aims to make financial services more accessible in the country by improving financial infrastructure and expanding digital finance.

It will also help rural banks and nonbank institutions offer better products and services through different channels.

Hattel said the reform actions supported by the loan “will ensure government assistance can reach people faster during crises and emergencies, help raise climate resilience of farmers and micro-, small- and medium-scale businesses through expanded insurance and promote improved financial stability.”

Based on the 2021 Global Findex Database, more Filipinos now have bank or mobile money accounts, increasing from 34 percent in 2017 to 51 percent in 2021. This growth, driven by Covid-19 lockdowns, nearly doubled accounts held by the lowest-income 40 percent to 34 percent from 18 percent.

The ADB said that the government was aiming to raise this number to 70 percent by 2024 via simplified requirements through the Philippine Identification System (PhilSys). As of September 1, almost 88 percent of the population were said to have been registered with PhilSys, launched in 2020 during the pandemic to boost financial inclusion.

“Key reforms pursued by the government to eliminate barriers to access financial services and mainstream gender across its policies include updating and providing action plans for the National Strategy for Financial Inclusion 2022-2028,” the ADB noted.