Global regulators push financial inclusion in Phl

MANILA, Philippines - The Alliance of Financial Inclusion (AFI), a global network of financial regulators, has underscored the need for the Philippine government to bring down the benefits of economic growth to the grassroots through financial inclusion.

AFI regional associate Eduardo Jimenez, in his talk during the recently-concluded annual convention of the Rural Bankers Association of the Philippines, said while there was good news of the country’s economy growing robustly in the first quarter of 2013, poverty rate is still at 27.9 percent, higher than most in the emerging Asian economies.

“First quarter GDP (gross domestic product) is 7.8 percent, highest among the Asian countries, and yet, there’s still a big need to lift the poor out of poverty especially the entrepreneurial poor,” Jimenez said.

Jimenez said one way to help in alleviating poverty and reaching out to the poor is through inclusive growth aided by financial inclusion.

The AFI official noted that 37 percent or 611 out of 1,634 municipalities have no banking offices and the concentration of banking services are normally in the high income and urban areas.

He said only two out of 10 households have a deposit account.

Thus, Jimenez urged the country’s rural bankers, the ones which have access to the countryside, to take on the challenge to sustain growth and at the same time grow their businesses.

“Let us think beyond the box, and let’s embrace financial inclusion which is consistent with the National Government’s overall objective as spelled out in the Philippine Development Plan (PDP) 2011-2016,” he said.

The PDP promotes equitable access to financial services and financial inclusion as part of the country’s strategy to enhance financial sector development.

Financial inclusion is a state wherein there is an effective access to a wide range of financial services to all.

Jimenez, however, noted that problem in financial inclusion is a global scenario.

He said about 2.5 billion people or more than 50 percent of the world’s adult population lack access to formal financial services.

About 90 percent, he said, of these unbanked people live in the developing countries.

“Greater financial inclusion can help mainstream these people to the financial system. Thus, greater economic growth, financial stability and social cohesion,” he said.

AFI, a network of more than 100 financial regulators and policy makers from about 90 developing countries, is currently taking the lead in bringing financial inclusion issues to the front worldwide.

AFI’s work is focused on consumer protection; data and measurements; financial integrity; formalizing microsaving; agent banking; and mobile financial services.

So far, AFI has recognized the Philippines as among those that have been establishing financial inclusion strategies through mobile money transfers.