Financial inclusion, BSP style (2)
IN last week’s article, we dwelt on improving access to financial services as the first of three complementary steps towards financial inclusion.
In this concluding article, allow me to describe the other steps which complete the cycle: namely, financial literacy and consumer protection. Financial Literacy
Bangko Sentral Governor Amando M. Tetangco, Jr. , in his article which appeared in the March, 2015, issue of Rotary Magazine, explains the rationale:
“At the second level/step of the ladder, we want to encourage savers to migrate and become investors.
“To us, saving is much more than income minus expenses.
“It is a discipline and a process central to which is financial education so that individuals can safekeep their principal while building a capacity to set aside a portion for risk taking and financial gains.” Tetangco adds: “It is this shift in risk awareness that allows savers to make wellinformed decisions and become retail investors.”
Tetangco’s message to grow our savings through wise investments may have a similar ring to the Biblical injunction as illustrated by the Parable of the Talents.
It is not enough to just play it safe like the third servant in the parable. It is important that we nurture and grow our resources just like the first and second servants did. We all know what happened. The third servant who simply buried his talent was punished for being lazy. The first and second servants, on the other hand, were amply rewarded for being good stewards.
So how does the Bangko Sentral go about spreading its gospel of financial literacy?
To target the young, the BSP has partnered with the Department of Education in a joint effort to cultivate among grade schoolers the correct financial habits. Now, lessons on spending wisely, saving, the benefits of opening a bank account, financial management and entrepreneurship are incorporated in the public elementary education curriculum.
This program has earned for both the BSP and the DepEd recognition by Child and Youth Finance International, an Amsterdam-based NGO, for having the Best Child and Youth Finance Education Program.
The BSP has even gone further through its Economic and Financial Literacy Program (EFLP) which has been conducted since 2000. The BSP outreach is being done not only nationwide but even around the globe where there are big concentrations of Overseas Filipinos.
The EFLP caravans feature, among others, seminars and expos which cover the following subjects: basics of saving, money management, appreciating different financial risks, personal finance, and planning for retirement.
Recently, the BSP formally launched Wealth Watch Book – a collaborative work of BSPers from the BSP Financial Consumer Protection Department (FCPD).
The book takes financial literacy one step higher.
Tetangco said: “The book is not for those who have no access to financial products and services but it is for those who have a little bit more than others, perhaps significantly more but who may need to be just as watchful.
“It is about stewardship of what you have. It is about preparing for unexpected events. It is about growth and growing what you have so you can have more.” Consumer Protection
Growing one’s finances involves both risks and opportunities. To temper the risks, the Bangko Sentral has institutionalized a framework — the Financial Consumer Protection Framework or FCP.
FCP aims to make consumer protection an integral component of banking supervision in the Philippines.
Tetangco explained that through ECP, the Bangko Sentral hopes to ensure that financial institutions under its supervision “develop a culture of fair and responsible dealings, while continually protecting the welfare of financial consumers”.
And all these are based on the fundamental tenets of “consumer empowerment, market conduct and collective responsibility”. Summing up, Tetangco said: “We are developing a more inclusive financial system to produce sustained economic expansion that supports inclusive growth.”
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