Philippines ranking in financial inclusion slips anew

MANILA, Philippines — The ranking of the Philippines in terms of an enabling environment for financial inclusion slipped anew for the second straight year, according to a study conducted by the Economist Intelligence (EIU).

Based on the 2019 Global Microscope, the Philippines ranked fifth with a score of 71 together with India. Last year, the ranking of the Philippines slipped to fourth from third spot.

Columbia topped the list with a score of 82 followed by Peru with 80, and Uruguay with 76.

On the other hand, Mexico jumped two spots to fourth place with a score of 74.

The Philippines received a score of 90 for stability and integrity, 85 for products and outlets, 76 for infrastructure, 72 for government and policy support, and 71 for consumer protection.

The report said the Philippines ranked 43rd in terms of connectivity, 34th in terms of commitment to cybersecurity, and 11th in emerging services.

 “Interoperability in retail payments is still constrained by a limited number of participating institutions and high transaction costs. The supervision of non-banks and microfinance institutions need strengthening as do dispute resolution mechanisms for government payments,” the EIU said in the report.

The Bangko Sentral ng Pilipinas (BSP) has created a support institution to focus on digital financial technology for reaching the underserved.

 “The Philippine has increased its focus on digital financial inclusion, with the launch of a biometric national identification system and a program to provide one-stop shop for online government services,” it said.

The BSP has committed to print 116 million pieces of blank ID cards under Republic Act 11055 or the Philippine Identification System (PhilSys) Act as part of a memorandum of agreement (MOA) with the Philippine Statistics Authority (PSA).

Despite the numerous IDs issued by the Philippine government, 14 percent of Filipinos are denied government and financial services for lack of proper identification documents.

With the Philippine ID, BSP Governor Benjamin Diokno earlier said unbanked Filipinos would have a proof of identity that is a key requirement in opening a bank account.

Malacañang has also institutionalized the Financial Inclusion Steering Committee (FISC) – the governing body that provides strategic direction, guidance and oversight in the implementation of the National Strategy for Financial Inclusion (NSFI).

The EIU said efforts are being made to increase financial and digital literacy, but they lack gender goals.

On the other hand, the Philippines ranked first in terms of credit portfolios for middle- and low-income customers, market entry as well as online requirements.