Another loan worth $300 million has been extended by the Asian Development Bank (ADB) to the Philippines, its host-country, this time to make financial services more accessible to Filipinos.
In a statement on Friday, the ADB said its policy support loan for the inclusive finance development program (subprogram 2) would be earmarked for reforms aimed at achieving the government’s targets under the national strategy for financial inclusion.
“These measures will strengthen the institutional and policy environment for financial inclusion, improve financial infrastructure, and increase the capacity and reach of service providers, especially rural banks and non-bank financial institutions,” the Manila-based multilateral lender said.
Launched in 2015, the national strategy for financial inclusion spearheaded by the Bangko Sentral ng Pilipinas “provides the national vision for financial inclusion and a platform for public and private sector coordination to ensure synergy of efforts in achieving shared objectives,” Bangko Sentral ng Pilipinas Gov. Benjamin E. Diokno said in a speech last month
However, the ADB noted that the Philippines had been among the cellar dwellers in the Asean across all financial inclusion indicators, citing results of the 2017 Global Findex Survey.
“Only 34 percent of Filipino adults have an account at a formal financial institution, compared with 49 percent in Indonesia, 82 percent in Thailand and 85 percent in Malaysia. The Philippines can expand financial access to poor Filipinos through credit, savings, insurance, pensions and remittances,” the ADB said.
Specifically, the newest ADB loan will support financial inclusion initiatives being rolled out by the BSP, the Department of Justice, the Insurance Commission, Philippine Guarantee Corp., the Philippine Statistics Authority and the Securities and Exchange Commission.
Key reforms include the rollout of the country’s national identification system, the launch of pilots on agriculture value chain finance, and public–private partnerships for crop insurance.
“It also supports government reforms to incorporate financial literacy programs in theK-12 basic education curriculum and increase the use of digital payments. It will help reorganize and strengthen Philguarantee’s operations, expand coverage of the credit reporting system, promote use of cloud-based core banking technology among rural banks, and support the development of Islamic finance,” the ADB said.