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Filipinos have started to save, but …

The government and the Bangko Sentral ng Pilipinas (BSP) face a lot of challenges in ensuring inclusive growth in the country. One of the key requirements is delivery of financial services and products and to do that, every Filipino no matter where they are, should have access to banks and non-bank financial institutions.

The BSP launched the “National Strategy for Financial Inclusion” (NSFI) in mid-2015 and recently released the results of the national survey, or the first “National Baseline Survey on Financial Inclusion”.



The NSFI is a comprehensive public document developed through a broad-based consultative process with private and public sector stakeholders involved in financial sector development. It “aims to enable coordination among various public and private sector stakeholders and optimize collective efforts toward financial inclusion.”

What the 2015 data show was what the central bank had expected but it also indicated just how challenging inclusive growth is going to be for the 12 government agencies – plus BSP – in carrying out financial inclusion programs.

BSP Governor Amando M. Tetangco Jr. said that first of all, the NSFI provides the BSP the “platform to reach out to the unbanked and the underbanked” by delivering “suitable financial products to different market segments through responsible and innovative business models, while providing the citizens with adequate education and protection as clients of the financial system.”

“To be implemented by the BSP with 12 other government agencies, NSFI serves as the country’s road map for catalyzing inclusive growth through the development of a more inclusive financial system,” added Tetangco.

The results of the survey basically show that a lot of Filipinos still do not save or not in the habit of saving up.aa

Based on the 2015 results, 25 percent of Filipino adults have never saved, while 32 percent used to save, and only 43 percent presently have savings. Of those who save, only 33 percent keep it in banks; the rest keep their savings at home.

About 47 percent of adults have outstanding loans, said Tetangco. The main source of borrowing is informal –  from family, relatives, friends and informal lenders. The share of bank loans is only 4.4 percent of the total.

Only 3.2 percent of adults have microinsurance coverage. The survey showed that financial clients rated themselves as only “somewhat satisfied” with how issues were resolved in most financial service access points, said Tetangco.

Need for comprehensive programs

Tetangco has reiterated again and again that the country is a “fertile ground” for inclusive growth despite that 25 percent of the population remains very poor.

The BSP chief said the “sound, stable and liquid” financial system calls for wider and more comprehensive programs that are focused on microbusinesses, migrant workers, indigenous peoples and cultural minorities, women, the youth, and persons with disabilities. “These sectors are typically unserved or underserved by conventional financial service providers,” he stressed.

Tetangco said that a small loan, some savings, a microinsurance, or remittance received as well as access to other financial services – all these present opportunities for Filipinos to break from poverty.

The NSFI, specifically, aims to come up with more financial products that are “diverse, well-designed, suitable and relevant to different market segments” and to enable a “citizenry that is financially-learned and adequately protected.”

The initiatives’ strengths rely on “clear and objective” consultative process and in monitoring data and its progress. The perceived weaknesses are in the sustainability and accountability especially as it pertains to its beneficiaries or the target market. The BSP already recognize a need to address the availability, sustainability, and integrity of data.

Thirteen government agencies promote an inclusive financial system and serving underserved markets, and they all collaborated in crafting the NSFI: The BSP, Commission on Filipinos Overseas, Cooperative Development Authority, Department of Budget and Management, Department of Education, Department of Finance, Department of Social Welfare and Development, Department of Trade and Industry, Insurance Commission, National Economic and Development Authority, Philippine Deposit Insurance Corporation, Philippine Statistics Authority, and Securities and Exchange Commission.