THE FINANCIAL inclusion environment in the Philippines is the third best in the world, although there remain challenges to ingrain such efforts among Filipinos, according to The Economist Intelligence Unit’s (EIU) “The Global Microscope 2015: The enabling environment for financial inclusion” report.
Out of the highest possible overall score of 100 across 12 indicators, the Philippines scored 81, up by two points compared with the previous report. The country this year also kept its global standing behind Peru and Colombia.
The country posted a perfect 100 in five of the 12 indicators: Government support for financial inclusion; regulatory and supervisory capacity for financial inclusion; regulation and supervision of credit portfolios; regulation and supervision of branches and agents, and grievances redress and operation of dispute resolution mechanisms.
The lowest score of 33 was registered in the requirements for non-regulated lenders indicator.
“The Philippines continues to achieve considerable local and global milestones in its pursuit of financial inclusion, owing to the country’s success in terms of the variety of players, which provides a wide range of financial services and products to the public,” the report read.
The EIU cited as one of this year’s financial inclusion highlights in the Philippines the signing of the National Strategy for Financial Inclusion last July. “The strategy establishes a framework and action plan for the government and the private sector to take a coordinated and systematic approach to the development of a financial system that is accessible and responsive to the needs of the entire population,” it noted.
The report also lauded the pilot this year of the Nationwide Baseline Survey on Financial Inclusion, whose results “provide a more accurate picture of the state of financial inclusion in the Philippines in terms of access, usage, quality and perceived welfare.”
“The Bangko Sentral ng Pilipinas is also working on a National Retail Payment System that will revolutionize payments in the country, and is set to get off the ground within two to three years. The Credit Information Corp., established under the Credit Information System Act in 2008, is now fully operational,” the report added as among the country’s noteworthy financial inclusion initiatives.
However, despite the strides made thus far, there remain a number of challenges to financial inclusion in the country, according to the EIU.
“While the Philippines has been a leader in promoting and creating an enabling environment for financial inclusion, there is still much to be done as only 26 percent of adult Filipinos have savings accounts and only 10.5 percent have access to formal credit,” it pointed out.
Also, “challenges remain in terms of scaling market innovations, particularly in technology-driven initiatives,” it added.
“There is also a chronic need for financial education and consumer-protection initiatives across regulated and nonregulated institutions,” the report said.