Why is financial inclusion important for the economy?
According to the World Bank, financial inclusion means that individuals and businesses have access to useful and affordable financial products and services, whether they are transactions, payments, savings, credit or insurance. delivered in a responsible and sustainable manner.
In a study prepared eight years ago, the Bangko Sentral ng Pilipinas (BSP) noted that access to financial services remains a significant challenge. He said that although there is a sustained increase in the number of banks and ATMs, distribution is heavily skewed towards highly populated and urbanized areas. At that time, only two in 10 Filipino households had a deposit account at a formal financial institution. The majority or 55% of adults are users of money transfers, loan and bill payment service providers.
PASB noted that technological developments, e-money regulations, among others, are transforming the provision of financial services from traditional brick-and-mortar infrastructure to a system complemented by authorized alternative financial service providers, new players such as telecommunications companies, and innovative distribution channels.
PASB is now talking about digital financial inclusion as the future of the financial system, realizing that the country and its people are too fragmented geographically to be able to expand through traditional means. Digital financial inclusion means digital access and use of formal financial services by the unserved and underserved population.
In the Philippines, where there are more people with cell phones than bank accounts, going digital seems the only way to reach new markets that traditional bank offices are unable to serve.
When the pandemic struck, most people found themselves unable to leave their homes and were forced to make electronic money transfers and payments using online banking or other financial services. powered by fintech or fintech. The use of digital technology for financial services was no longer limited to the rich.
What seemed like a dream is now within reach of the BSP. According to BSP Governor Ben Diokno, they are confident that by 2023, 50% of all financial transactions will be done digitally. This digital transformation is also encouraging more people to open bank accounts, so that by the same year, 70% of Filipino adults are expected to have formal bank accounts.
In fact, the BSP has already seen a 5,000% increase in digital transactions since the quarantine restrictions began.
Now even palengke stalls and sari-sari shops use QR codes to allow their customers to transfer funds for payment for their purchases.
BTI Payments, a subsidiary of Banktech, the industry leader in the Sydney-based ATM market, said it recorded millions of transactions in 2020 and expects to double the numbers each year for its CashConnect ATMs and kiosks Pay & Go with over 600 nationwide.
Compared to banks, the services offered by FinTech companies are accessible even to people living in remote and isolated communities.
As the demand for the services offered by financial technology companies increases by leaps and bounds, they are now investing more in improving the usability of their services to ensure the safety of user funds and the privacy of their users’ data.
In 2019, e-money transactions grew 36 percent to 760 billion pesos, surpassing the growth of credit and debit card transactions to 18 and 15 percent, respectively.
The Philippines is currently home to more than 190 fintech companies, with loans, payments, digital wallets and remittances being the top four. Electronic wallets and digital banking apps now define how Filipinos send and receive payments, pay their bills, and how businesses accept payments and even pay salaries.
The way people and businesses do their transactions has changed and will not return to what it was before the pandemic. Hopefully our regulatory environment can keep pace with the needs of the moment, because supporting digital financial services helps our economy operate despite challenges.
Shining moment for Phl
The Philippines were fortunate to have had the opportunity to host the 30th Biennial Southeast Asia Games in 2019.
And why is that?
The 2019 Games, which ran from November 30 to December 11, came just weeks before the World Health Organization learned of cases of pneumonia of unknown cause in the city of Wuhan, China, on December 31 and before a new novel coronavirus was identified as the cause and temporarily named 2019-nCOV.
Organizers have postponed this year’s games until next year, which will be held in Vietnam, though still under a cloud of uncertainty amid COVID-19 fears.
In 2019, more than 5,000 athletes from 11 countries participated, with the world champion from the Philippines becoming the world champion and winning a total of 387 medals, including 149 gold. It was our shining moment as a country.
Even the Vice President of the Olympic Council of Asia, Wei Jizhong, congratulated the organizers and President Duterte on the successful hosting of SEAG, saying the country was ready to host bigger sporting events.
Unfortunately, our accommodation was marred with allegations when Senate Minority Leader Franklin Drilon claimed the SEAG cauldron was extravagant because it cost 50 million pesos to build. The actual cost, however, is 45 million pesos, but the claim sparked an uproar from Filipino netizens and athletes, some of whom said the amount could have been better spent on them for their allowances and training.
The cauldron was designed by no less than the late national artist for architecture Francisco Mañosa.
Next, President Alan Peter Cayetano, who chaired the Philippine Southeast Asian Games Organizing Committee (PHISGOC), appeared before the Senate to allay any concerns and was able to clear the matter up. . He could have invoked legislative protocol and interparliamentary courtesy, but he did not.
Two years later, in a TV interview, Cayetano revealed that the construction of the cauldron was in fact funded by the private sector and that he had not taken a single centavo from SEAG’s hosting.
Although these are the biggest SEA Games to date, the Philippine government has only spent 6 billion pesos on it, with the rest coming from sponsorships. Singapore, host of SEAG 2015, spent the equivalent of 15 billion pesos. Singapore also commissioned top-rated DP architects to build its SEAG cauldron at a cost equivalent to 63 million pesos.
President Duterte personally chose Cayetano to lead PHISGOC to ensure that SEAG funds were properly spent and accounted for to the last penny. And indeed, the President chose well.
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