France endows RBAP ₧47.9M for digitization

THE French government has extended a grant of P47.9 million (about $943,839.80 at current exchange rates) to the Rural Bankers Association of the Philippines (RBAP) to support the digital transformation of rural banks.

The Agence Française de Développement (AFD or French Development Agency) said the grant will fund the training, capacity-building and communication and awareness-raising activities.

This will support the digital transition of core banking systems to the cloud, a statement by the AFD read. The AFD said it hopes the move will further boost financial inclusion in the country.

“France is proud to support, through AFD, [the] strategic reforms of the Government of the Philippines in digital transformation and inclusion in the financial sector to the benefit of the Filipino people,” French Ambassador to the Philippines Michèle Boccoz was quoted in a statement as saying.

“We believe that this program through the AFD and RBAP partnership will help pave the way to resilience and recovery, especially of disadvantaged Filipinos in the rural areas,” Boccoz added.

The AFD said the technical assistance is provided within the framework of the global public policy reform of the financial inclusion sector in the Philippines and the implementation of the Inclusive Finance Development program (IFDP).

Inclusive growth

THE IFDP contributes to the overall objective of inclusive growth and sustainable development of the Republic of the Philippines by supporting the development of financial inclusion of the population, especially the poor and the rural population.

This is done through the consolidation of the institutional and regulatory environment and the improvement of financial infrastructures and the capacity building of financial services providers, supervisors, and regulators.

The AFD and the Asian Development Bank (ADB) have been supporting this program since 2019 through a 100-million euro sovereign loan (about P5.977 billion) to the Government of the Philippines.

RBAP President Elizabeth Carlostimbol was quoted in the statement as expressing gratitude “for the support and trust that AFD has given to our association.

Timbol said one of her goals as RBAP president for fiscal year 2020 to 2021 “is to help rural banks, especially the small ones, to digitize and capacitate them through different programs.”

“Through this partnership, this goal is finally realized,” she added.

Timbol said the association is looking forward “to working with AFD to create capacity building programs tailor-fitted to the needs of the rural banks for us to be able to compete at par excellence with the other financial institutions in the country.”

Unique position

LAURENT Klein, AFD country director in the Philippines, said rural banks are in a unique position to extend much-needed financial services in the countryside.

Through the partnership with RBAP, Klein said, it is AFD’S aim to support financial systems “and fight social and economic inequalities.”

Boccoz said the technical cooperation is a milestone in the bilateral relationship between Manila and Paris.

She added that the Covid-19 pandemic has disrupted societies and has led the French government to “consider radical shifts” their “usual modes of economic and social interactions.”

“This technical assistance will contribute to promote access to quality digital financial services for all, including the most vulnerable part of the population. This agreement also marks a major step forward in our collaboration with the ADB to support inclusive finance in the Philippines,” Klein said.

Data from the National Economic and Development Authority (Neda) showed that Official Development Assistance received by the country from the French government amounted to $147.44 million or 0.68 percent of the total ODA for the Philippines.

Neda data showed that as of December 2019, the French ODA is composed of two loans worth $142.22 million and three grants worth $5.22 million.

In 2019, the country received a total of $21.62 billion in ODA commitments. This is composed of 268 grants and 84 loans. Total grants amounted to $1.64 billion while total loans reached $19.976 billion in 2019.