MANILA, Philippines – In his last month in office, President Benigno Aquino III signed into law the creation of a committee that will monitor the delivery of financial services to low-income households in the Philippines.
Aquino signed Executive Order No. 208 last June 2 to institutionalize the Financial Inclusion Steering Committee (FISC). (READ: APEC 2015: How to make economic growth inclusive)
FISC is the governing body that will provide strategic direction, guidance, and oversight in the implementation of the National Strategy for Financial Inclusion (NSFI).
The NSFI, developed through a consultative process, serves as a guide for public and private sector stakeholders to accelerate financial inclusion in the Philippines.
Sunny growth’s flip side
The latest gross domestic product (GDP) numbers make the Philippines the fastest-growing economy in the region, ahead of regional giant China.
Yet the economic growth has not been fully inclusive, as access to financial services remains a challenge. (READ: ADB: Poor Pinoys have little access to microfinance)
The Bangko Sentral ng Pilipinas (BSP) said that about 68% of adults who save keep their savings at home; 72% of those who borrow do so from informal sources; and only 30.5% of small and medium enterprises (SMEs) have bank loans or formal lines of credit.
The central bank added that around 12% of the 1,634 municipalities all over the country still have no access to a bank or other types of financial service providers.
Of the 2.5 billion retail payment transactions processed in the country per month, only 1% is through digital means.
These are the loopholes that FISC will aim to fill in.
The tall order
With the effective implementation of the NSFI, through the committee’s oversight, the BSP expects more people to benefit from having access to financial services and contribute to broad-based growth.
The committee consists of government agencies that were instrumental in crafting the NSFI, chaired by BSP Governor Amando Tetangco Jr.
Members include the heads of the Department of Finance, Department of Education, Department of Trade and Industry, Department of Social Welfare and Development, Department of Budget and Management, National Economic and Development Authority, Insurance Commission, and Commission on Filipinos Overseas.
Heads of the Securities and Exchange Commission, Philippine Statistics Authority, Philippine Deposit Insurance Corporation, and Cooperative Development Authority will also be part of the committee.
Among the FISC’s tall orders are to align various financial inclusion-related policies and programs; ensure effective monitoring of the progress of these initiatives; and collaborate with public and private sector stakeholders.
The NSFI was launched in July 2015 in the presence of Her Majesty Queen Maxima of the Netherlands, in her capacity as the United Nations Secretary General’s Special Advocate for Inclusive Finance and Development. – Rappler.com