Philippines improves global ranking in digital, financial inclusion

MANILA, Philippines – The global ranking of the Philippines in providing digital and financial inclusion improved to sixth place this year from 15th last year amid the reforms being pursued by the Bangko Sentral ng Pilipinas (BSP), according to a report by Washington-based think tank Brookings Institution.

Based on the 2016 Financial and Digital Inclusion Project report titled Advancing Equitable Financial Ecosystems, Brookings said the Philippines got a score of 76 percent for sixth place this year from a score of 68 percent or 15th place last year. 

“The biggest improvement in scores between 2015 and 2016 was made by the Philippines, which increased its overall score by eight percentage points,” the report said. 

Brookings said the increase was driven in part by the launch of the National Strategy for Financial Inclusion (NSFI) by the BSP as well as the strong performance in terms of mobile capacity as the Philippines has the highest rates of smartphone penetration.

The report noted mobile money interoperability arrangement between PayMaya Philippines and GCash would further promote increased adoption of digital financial services in the country. 

However, the report noted there remains a significant untapped opportunity for increased take up of digital and financial services in the Philippines. 

The Philippines garnered a perfect score of 100 in country commitment and regulatory environment. It also received a score of 94 percent in mobile capacity and 42 percent in adoption. 

Kenya topped this year’s list with 84 percent followed by Columbia with 79 percent, Brazil with 78 percent, and South Africa with 78 percent. Completing the top 10 were Rwanda with 76 percent, Chile with 74 percent, Mexico with 74 percent, and Nigeria with 72 percent. 

The 2016 report acknowledged the work of the BSP in shepherding implementation of the Philippine NSFI and advancing the formalization of the high-level inter-agency Financial Inclusion Steering Committee (FISC).  

It also recognized BSP’s past leadership role in the Alliance for Financial Inclusion (AFI) as well as its commitment to the AFI Maya Declaration to deepen financial inclusion in the Philippines.

 Brookings also cited the BSP as a front-runner among central banks in establishing a dedicated financial inclusion unit for its work on financial inclusion data and reporting; and for the issuance of enabling and proportionate regulations.

 The think tank said the National Retail Payments System (NRPS) launched by the regulators and the private stakeholders would provide a more efficient, safe, affordable and inclusive retail payment infrastructure that allows digital transfers from any account to any account in any type of institution, through the use of any digital device.

 By 2020, NRPS targets to digitize 20 percent of retail transactions from the current level of only one percent of the 2.5 billion payment transactions made in the Philippines. 

Brookings increased its sample to 26 geographically, economically and politically diverse countries this year from just 21 in 2015.