BSP has fresh P41-M grant for financial inclusion

Published September 17, 2021, 12:16 PM

by Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) has received a P41.3-million (EUR 700,000) new grant from the Agence Française de Développement (AFD) for its financial inclusion project.

BSP Governor Benjamin E. Diokno said Thursday that the grant will finance a technical assistance for financial inclusion and its National Strategy for Financial Inclusion initiatives. The funding will also finance the utilization of technology for digital finance regulation and expand the digital financial literacy program for rural and women-owned businesses and agricultural insurance.

“The grant from the French Development Agency is expected to enhance the BSP’s initiatives to empower marginalized sectors in the Philippines by providing them access to financial products and services,” said Diokno. The project will start in the last quarter of 2021 and is expected to be completed by 2026.

BSP Director of the Financial Inclusion Group-Center for Learning and Inclusion Advocacy, Ellen Joyce Suficiencia, said this is the second grant they have received for financial inclusion and a first from AFD. It will complement the Inclusive Finance Development Program (IFDP) of the Asian Development Bank. The AFD in fact is a supporter of the IFDP which has a funding of P5.88 billion (EUR 100 million) as sovereign policy-based loan to the Philippines.

“This is our first time (as grant recipient) with AFD,” said Suficiencia. Apart from the BSP’s continuing technical assistance support from the ADB, the AFD is the only other financial inclusion support they have.

Diokno said the BSP’s use of the AFD grant, which are in three component activities, will include optimization of data and analytics for financial supervision. “This will involve the identification of all possible applications and use cases of suptech in BSP’s financial supervision (and) the development of a suptech strategy and implementation blueprint,” he said.

Diokno said the second component is financial education with focus on digital finance while the third is a public policy dialogue on agricultural insurance with a view to mitigating climate risks. “This will focus on the assessment of the feasibility of scaling-up the adoption of digital solutions to improve efficiencies in agriculture insurance, and the development of an insurance literacy training program,” said Diokno. The Philippine Crop Insurance Corp. and the Insurance Commission have formally expressed their support for these activities, he added.

In a statement, AFD Country Director Laurent Klein said they will continue to “support financial systems” and regulators such as the BSP to “fight social and economic inequalities”.

“The project that will result from this cooperation will contribute to the country’s efforts to promote access to quality financial services for all, including the most vulnerable part of the population,” said Klein.

The French Ambassador to the Philippines, Michèle Boccoz, in the meantime said France aims to improve bilateral relationship with the country. “We are keen to support the Government of the Philippines, through AFD, in strategic reforms towards digital transformation and inclusion. The COVID-19 pandemic gave rise to challenging situations, but also opportunities to leverage on digital technologies to improve financial sector services that would ultimately benefit Filipinos from all walks of life,” he said.

The BSP since 2007 has a financial inclusion office, it was the first central bank to establish a dedicated financial inclusion unit.

The BSP has a target of onboarding 70 percent of all adult Filipinos to have formal accounts by 2023.

Diokno said he remains confident of achieving this target. “I’m optimistic that the 70 percent target for 2023 is doable,” he told reporters during his virtual press briefing. He cited three reasons: the pandemic-driven momentum for the increase use of digital; the “game-changing” national ID or the PhilSys ID; and the whole of government approach in addressing the challenges of promoting financial inclusion.

Based on the 2019 BSP financial inclusion survey, 29 percent of Filipino adults have accounts. For the period 2019 to 2020, basic deposit accounts have increased by 65 percent to 6.6 million from four million. Electronic money or e-money accounts also grew by 94 percent to 34.7 million from 17.9 million accounts in the same period.

Diokno said they use both the basic deposit account and e-money account data as proxy indicators because these types of accounts are typically opened by those who were previously unbanked.

 
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