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Philippines global financial inclusion ranking slips further
MANILA, Philippines — The global financial inclusion ranking of the Philippines slipped further this year despite improvements spurred by the government’s need to promote digital channels as part of its response to the COVID-19 pandemic.
Based on the 2020 Global Microscope of the Economist Intelligence Unit (EIU), overall ranking of the Philippines dropped to eighth with a financial inclusion score of 71 from fifth spot with a score of 69 last year.
Columbia retained the top spot tied with Peru followed by Uruguay, Argentina (up two spots), Mexico, India, Tanzania (up eight places), and Brazil.
The ranking of the Philippines has been slipping since placing third in the 2016 Global Microscope report.
The EIU said the Philippines, Thailand, and Russia saw the greatest improvements in Asia and Eastern Europe amid the increased use of digital transactions due to the pandemic.
“The Philippines created a new set of rules and regulations for crowdfunding platforms,” the EIU said. It ranked second in the region next to India with a score of 73 and was followed by Indonesia with a score of 68, China with 64, and Thailand with 63.
The EIU said the overall financial inclusion score of the Philippines was better than the average score of 54 in East and South Asia and 53 in lower middle income economies.
It added the Philippines received a score of 71 for government and policy support, 85 for stability and integrity, and 75 for consumer protection.
The country received a perfect score of 100, up by 10 points from last year in terms of products and outlets.
“The government of the Philippines has launched both fiscal and monetary measures in response to the COVID-19 pandemic,” the EIU said.
For one, the Bangko Sentral ng Pilipinas (BSP) has introduced a series of regulatory relief measures for the banking sector, including a temporary relaxation of compliance reporting requirements., determined on a case-by-case basis, and provided easier access to a rediscounting facility.
Furthermore, BSP-supervised financial institutions are required under Republic Act 11494 or the Bayanihan to Recover as One (Bayanihan 2) to grant another 60-day extension for all loan payments that are due during the enhanced community quarantine period without charging interest, penalties, fees or other charges.
The BSP also waived fees and charges for financial institutions setting up digital payment services for beneficiaries using such services during the enhanced quarantine period.
The BSP also reduced the minimum liquidity ratio (MLR) for standalone thrift banks, rural banks and cooperative banks to 16 percent from 20 percent until the end of the year.
The central bank also allowed loans to micro, small, and medium enterprises (MSMEs) to be considered part of banks’ compliance with reserve requirements and has reduced credit risk weights to 50 percent from 75 percent to promote liquidity and credit in the financial system.
According to EIU, the government’s fiscal package provided an emergency cash aid program to 18 million low-income households, enabling cash transfers ranging from P5,000 to P8,000 a month for two months.
Source: https://www.philstar.com/business/2020/11/26/2059421/philippines-global-financial-inclusion-ranking-slips-further