MANILA, Philippines - The Economist Intelligence Unit (EIU), the business information arm of The Economist Group, ranked the Philippines third overall worldwide in terms of microfinance business environment.
Bangko Sentral ng Pilipinas officer-in-charge Nestor Espenilla Jr. said the country ranked third overall with a score of 68.4 out of 55 countries after Peru (73.8) and Bolivia (71.7) in EIU’s pilot index and study entitled “Global Microscope on the Microfinance Business Environment.
The study commissioned by the World Bank’s International Finance Corp., Corporacion Andina de Fomento and Multilateral Investment Fund Inter-American Development Bank.
“The results of the study showcase the Philippines as a definite success in microfinance,” Espenilla said.
He reported that the country together with Cambodia ranked first overall in the area of regulatory framework after it received a perfect score of four for the way it regulates the microcredit activities of established financial institutions.
The report cited the ability of the Philippine government to promote a regulatory and policy framework through the General Banking Act of 2000 that is conducive to microfinance operations.
The Philippines also received the highest score possible for its legal environment for forming and operating specialized microfinance institutions.
Espenilla said latest figures show that 221 banks involved in microfinance have outstanding loans of over P6 billion to nearly 900,000 microentrepreneurs who have over P1.7 billion in savings.
The country received a score of three for its regulatory and examination capacity as bank examiners reportedly still lack sufficient appreciation of the unique circumstances of the microfinance sector.
It also received a score of two in terms of services offered by microfinance institutions as the central bank continue to review policy initiatives to develop micro-insurance, branchless banking, and the use of mobile phones to make loan payments, deposits, and withdrawals.
“This recognition should be viewed as an affirmation that we are doing things right. More than that, however, it should be viewed as a motivation for all of us work on the areas in which we can still improve as well as to move us to push the frontier even further,” Espenilla said.
He added that the BSP would continuously work toward the strengthening of the banking system to increase the number of stronger banks that have the capacity to expand their branching and operating network.