The country’s financial inclusion program was named third best program in the world and the best in the region, according to the Economist Intelligence Unit (EIU).
The research and analysis arm of the prestigious The Economist publication also paid tribute to the country’s “highly capable regulator, optimal credit regulation and effective dispute-resolution mechanisms.”
According to the EIU, only the financial inclusion programs of Peru and Colombia proved better than Manila’s.
The Philippines scored high in the rankings; 79 points out of 100, where 100 is best, Peru scored 87 while Colombia scored 85. The Philippines ranked the highest in East and South Asia, beating the region’s average score of 49 points.
In a report, titled Global Microscope 2014: The Enabling Environment for Financial Inclusion, the prestigious publication cited the Bangko Sentral ng Pilipinas’s (BSP) all-out support for the country’s microfinance sector.
“The BSP continues to promote and enabling environment for financial inclusion through the issuance of various regulations and circulars which seek to encourage new entrants of financial services providers and products that serve the poor, while also ensuring the safe provision of such services,” the EIU said.
The EIU was most impressed by the establishment of an inclusive steering committee only recently constituted to help craft a strategy for financial inclusion in the country.
“This is only one of three internal committees that the governor chairs, which is indicative of the importance that the governor accords to financial inclusion,” The Economist said, citing the role played by BSP Governor Amando M. Tetangco Jr.
The intelligence unit also cited the central bank’s creation of a general consumer protection framework, which was approved in May this year.
However, The Economist said while the country is almost always among the top contenders in the financial inclusion programs not only in the region but, likewise, around the world, much work needs to be done in terms of distribution of financial services to far-flung areas in the archipelago.
“While there has been a sustained increase in the number of financial-services providers and products, distribution is skewed toward highly populous and urbanized areas. There is still much to be done, as only 26.6 percent of the adult population over age 15 has a deposit account, according to the 2011 World Bank Global Financial Inclusion Database,” The Economist said.
The research unit further said archipelagic barriers remain a significant challenge to increasing access to financial services to low-income and underserved members of the population.
“In an archipelago made up of more than 7,000 islands, there are huge financial, security and logistical challenges in reaching the poor and unbanked,” The Economist said.