The overall ranking of the Philippines dropped three spots to eighth this year from fifth last year in the 2020 Global Microscope of the Economist Intelligence Unit’s financial inclusion score, despite improvements spurred by the government’s need to promote digital channels as part of its response to the Covid-19 pandemic.
The country’s financial inclusion score of 71 ranked 8th, following a disappointing trend that has seen the Philippines ranking steadily slipping since placing third in the 2016 Global Microscope report.
Despite the drop in score and ranking, 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. Our overall financial inclusion score of 71 was better than the average score of 54 in East and South Asia and 53 in lower middle income economies.
The EIU noted the Philippine government has launched fiscal and monetary measures in response to the COVID-19 pandemic such as the Bangko Sentral ng Pilipinas introducing a series of regulatory relief measures for the banking sector and Republic Act 11494 or the Bayanihan to Recover as One granting 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 government’s fiscal package also 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.
As with almost everything these days, financial inclusion initiatives will certainly take a hit from the COVID-19 pandemic. However there are also numerous opportunities afforded by our new normal that could improve such efforts and benefit more Filipinos. A government that continues to make available more opportunities for its people to access financial services so they can improve their lives will eventually reap the rewards of such efforts.*