Expanding financial inclusion to help in PH’s recovery: Diokno
MANILA – Improving the financial inclusion landscape in the Philippines is seen to further help in the recovery of the domestic economy from the pandemic.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, in a taped speech during the Pru Life UK Online Investment briefing Friday, said “financial inclusion has become a compelling strategy for sustainable growth.”
He said government efforts to include more Filipinos into the financial system are now bearing fruit as shown partly by the increase in the number of people who now own financial accounts, primarily electronic money (e-money) accounts.
Citing the results of the 2019 Financial Inclusion Survey (FIS), he said account ownership jumped to 29 percent that year from about 23 percent in 2017, or an additional five million people having new accounts.
During the same period, Diokno said formal credit rose from 14 percent to 19 percent; insurance, from 18 percent to 23 percent; and investments, from 23 percent to 25 percent.
He said Filipinos are slowing embracing insurance products “to bolster their financial resilience.”
He said “investments are especially critical to realizing financial inclusion, as these lead to greater market participation and enterprise opportunities.”
“Investments provide people the means to enhance their financial health, as well as to protect their welfare against economic risks and sudden downturns, such as this ongoing pandemic,” he said.
Amidst these improvements, Diokno said the reality is that 75 percent of the population, or about 54 million, do not have investments.
“While this figure may be disappointingly low, it shows, however, immense room for growth in the investment market,” he said.
Thus, he said regulatory initiatives are continuously put in place to further strengthen moves towards greater financial inclusion.
“In recent years, the BSP has taken the necessary steps to ensure that it will be easier for Filipinos, especially the unbanked and underserved, to be financially included by leveraging on technology,” he added.
The benefits from using technology in the financial inclusion bid was significantly felt when the government placed Luzon under an enhanced community quarantine (ECQ) from mid-March until end-April, which was extended until end-May for Metro Manila, and until now that movement restrictions have been eased.
The government was able to disburse its financial aid program by transferring the funds either to the beneficiaries’ bank accounts or their e-money accounts.
Diokno said the volume of PESONEt, an electronic fund transfer mode, and InstaPay, a real-time, low-value payment system, rose by 143 percent and 820 percent, respectively, last August alone.
He said investing can now also be done electronically after the central bank allowed trust corporations to distribute their unit investment trust funds (UITF) through third parties, namely individuals and institutional agents.
“Through our recent initiatives, we aim to encourage more Filipinos to try available investment products that can benefit and help them build a solid financial future,” he added. (PNA)
On Photo: BSP Governor Benjamin Diokno. (File photo)