Access to financial services continues to expand
NEARLY ALL cities and towns in the Philippines now have access to financial services, the outgoing central bank chief said, noting that this would help improve living conditions and support economic growth.
“In recent years, we have allowed the establishment of micro- banking offices ( MBOs) and alternative financial service providers in the underserved markets in the country. We are proud to say that by the end of 2016, close to 90% of municipalities and cities in the Philippines already have some form of access to financial services,” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. said in a speech delivered by Monetary Board Member Valentin A. Araneta.
“Improving access to payment facilities and formal credit lines could make a positive difference in people’s lives, especially for the poor.”
Mr. Araneta read Mr. Tetangco’s message during the 28th East Asian Seminar on Economics hosted by the Philippines at the Conrad Manila yesterday.
MBOs are scaled- down bank offices meant to cater to the needs of small depositors, and are authorized to conduct “limited” banking activities such as releasing small- scale loans, serving as bills payment centers, selling microinsurance products, and accepting foreign exchange.
More than 36% of Philippine towns are unbanked, according to the central bank’s first-quarter report, but noted that most of these areas are served by nonbank firms like pawnshops and cooperatives.
The BSP wants to get more Filipinos aboard formal financial channels to improve access to credit and make fund transfers
more efficient, under its planned National Retail Payments System that will make use of digital channels.
The government is looking to trim the poverty rate to an alltime low at 14%, versus the 21.6% tallied in 2015, according to data from the Philippine Statistics Authority.
INEQUALITY PERSISTS
There is rising income inequality in the Philippines as well as in other developing nations, Asian Development Bank (ADB) chief economist Yasuyuki Sawada said during Thursday’s forum, noting that the top-income earners are getting even richer as some people remain poor.
Differences in educational attainment and a disparity between rural and urban communities are among the biggest factors behind uneven incomes, which in turn “dampens the poverty reduction impact” of strong economic growth, the ADB official added.
“Policy makers can act to reverse rising inequality through infrastructure development,” Mr. Sawada said, noting that improved connectivity and access to social services and jobs would help reduce the income gap.
The multilateral lender said emerging Asian economies need to spend $26 trillion until 2030 to bridge the infrastructure gap, which factors in the need for power, transport, telecommunications, and water and sanitation.
The Duterte administration is looking to spend P8.4 trillion over the next six years to catch up with the Philippines’ growing infrastructure needs, while also helping to boost economic growth to as fast as 7-8%.