FINANCIAL inclusion in the country has been improving over the years, according to the Bangko Sentral ng Pilipinas (BSP).
BSP Deputy Governor Bernadette Romulo-Puyat made that disclosure during the forum “Digital Innovation: Advancing Financial Inclusion for MSMEs (micro, small and medium enterprises)” of the American Chamber of Commerce in the Philippines on Tuesday.
Romulo-Puyat said account ownership among adult Filipinos significantly grew to 56 percent in 2021 from 29 percent in 2019.
She attributed the increase to the sudden need for transaction accounts to conduct financial transactions during the lockdowns imposed due to the Covid-19 pandemic.
“The rapid shift to digital among Filipinos is reflected in the [increasing] usage of digital financial services,” said Romulo-Puyat.
Six of 10 Filipino adults used their mobile phones and the internet for financial transactions in 2021 as compared to 2019 when only 1 out of 10 did so.
Romulo-Puyat said the share of digital payments to the total volume of retail payments “is continuously growing” at 30 percent in 2021, from just 10 percent three years before.
There has also been an increase in the percentage of adult Filipinos who owned an investment between 2019 and 2021, she said.
However, Romulo-Puyat underscored that the number of borrowers who obtained loans from formal sectors did not change. The number of insurance owners decreased, she added.
“In terms of financial access points, 96 percent of cities and municipalities had at least one access point, which includes pawn shops and remittance agents, and 85 percent served by banks based on 2020 data,” said Romulo-Puyat.
While owning a bank account is not the only indicator of financial inclusion, Romulo-Puyat said the feature would help users access a wider range of financial services.
She added the government can better promote financial inclusion in the country by shifting to an account-based distribution from a cash-based distribution.
Romulo-Puyat said the issuance of Executive Order (EO) 170 is expected to fast-track digital payments in the government. That EO is titled “Adoption of Digital Payments for Government Disbursements and Collections,” and was signed by former president Rodrigo Duterte on May 12, 2022. It mandates all departments, agencies and instrumentalities of the government to utilize digital channels in the disbursement and collection of payments.
“As we move into the next frontier for inclusive digital finance, we need to ensure that digital innovations are harnessed for high impact benefits, not only for a few, but for the wider population,” said Romulo-Puyat.
MSMEs and digitalization
When it comes to MSMEs, Romulo-Puyat highlighted the crucial role of digital innovation in driving growth among local businesses and industries in the country which, in turn, increase their contribution to the nation’s economic performance.
“Digital innovation is not only about creating new industries and transforming the current ones. It also allows the gains to be passed forward onto their clients. This is true for financial service providers in terms of wider reach and innovative financial services leading to greater financial inclusion,” Romulo-Puyat said.
She noted the large contribution of MSMEs to the country’s economic growth, which comprise 99.51 percent of business establishments in the Philippines, and employ about 63 percent of the country’s workforce. Romulo-Puyat said that while growth among MSMEs is an indication of a thriving and growing economy, these entities still face various constraints that prevent it from realizing its full growth and potential, one of which is the lack of access to financing.
“For MSMEs, access to financial services will empower them to grow their business and provide more livelihood to their communities,” the BSP deputy governor said.
WITH EIREENE JAIREE GOMEZ
Source : From the Web