MANILA -The Philippine government’s efforts to help expand Filipinos’ access to financial services was given a fresh boost after the Asian Development Bank (ADB) approved a $300-million loan to support this push.
Dubbed “Inclusive Finance Development Program, Subprogram 3,” the new policy-based loan supports reforms to improve financial inclusion in the Philippines by improving the country’s financial infrastructure, including widening the digital financing ecosystem.
The loan also supports efforts to increase the capacity of financial service providers, including rural banks and nonbank financial institutions, to offer quality products and services accessible through various delivery channels.
Kelly Hattel, senior financial sector specialist at ADB, said in a statement that through this loan, the multilateral lender 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.
“Considering the significant impact of climate change on the vulnerable segments of the population, 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,” Hattel said.
Digital platforms
Also, the new loan builds on ADB support provided under the Inclusive Finance Development Program Subprogram 1 and Subprogram 2, respectively delivered in October 2018 and August 2020.
READ: ADB grants PH new $300 million loan to boost inclusive growth
Further, reforms pursued under the new loan will complement other ADB programs in the Philippines such as the Competitive and Inclusive Agriculture Development Program Subprogram 2, which was approved last January.
Citing the 2021 Global Findex Database, the ADB noted that the number of Filipino adults who hold an account with a financial institution or mobile money provider has risen to 51 percent of the population as of 2021, from 34 percent in 2017.
READ: 41 million Filipinos now have banking, e-money access
At the same time, the ratio of the number of accounts for the poorest 40 percent of Filipinos nearly doubled to 34 percent in 2021, from 18 percent in 2017, thanks partly to COVID-19 pandemic lockdowns.
The government’s goal is to raise the number of Filipinos holding an account to 70 percent by 2024.
For this purpose, the government has adopted and is implementing key reforms to remove barriers to access financial services through the Financial Products and Services Consumer Protection Act.
This is also being done through rules that encourage digital platforms to provide financing to Filipinos who are active in the agriculture value chain, in support of the Agriculture, Fisheries and Rural Development Financing Enhancement Act of 2022.