The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian Development

Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee
the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not
necessarily be consistent with ADB official terms.

Jenny A. Romero
Bank Officer IV
Inclusive Finance Advocacy Office
Bangko Sentral ng Pilipinas

30 October 2018
 FINANCIAL INCLUSION SCENARIO
ACCESS USAGE

2014 2017
Adults with a
31.3% 34.5%
formal account
With at least one banking office Source: World Bank Findex
Unbanked

2015 2017

Adults with savings 43% 48%

(formal savings) (17.5%) (18.8%)

Adults with 47% 22%

Q2 2015 Q1 2018 outstanding loans
Unbanked LGUs 595 552 (informal sources) (72%) (40%)
(out of 1,634)
Source: BSP Financial Inclusion Dashboard Source: BSP Financial Inclusion Survey
 OPPORTUNITIES IN DIGITAL FINANCE

The Philippines is an attractive market

for digital financial services.
6 out of 10
without bank deposit
but with mobile phone
(FINTQ, 2018)

113% 59%
SIM smartphone
penetration adoption
(GSMA, 2017) (GSMA, 2016)

58% 63% 3 hrs,

63%
unique mobile internet
social media
57 mins
subscription users average time
(We Are Social, 2018) (We Are Social, 2018) penetration spent on social
(We Are Social, 2018)
media per day
(We Are Social, 2017)

Sources: Global System for Mobile Communications Association (GSMA), We Are Social, FINTQ
INNOVATIVE FINANCE MECHANISMS FOR MSMES

Peer-to-Peer (P2P) Lending

Equity Crowdfunding

Merchant and e-Commerce Finance

Invoice Finance
BSP AND DIGITAL FINANCE
Digital Finance Ecosystem: For Inclusion

INNOVATIVE PRODUCTS

NATIONAL RETAIL PAYMENT SYSTEM

STRONG MARKET CONDUCT

STRONG CYBERSECURITY
DIGITAL FINANCE
ECOSYSTEM
PHYSICAL NETWORK
(CASH-BASED)

RISK-BASED KYC

BASIC ACCOUNT
 OPPORTUNITIES IN MSME FINANCE
of total business
99.6% establishments

Share in total banking

6.6%
61.6% of total employment system loans

Share in total
9.8% business loans

Demand-side Supply-side
Difficult requirements High risk
Cumbersome, slow applications High cost
High costs/interests Low revenue/account
Fear of decline Difficult to reach/dispersed
Low business financial literacy Informality

Sources: Philippine Statistics Authority (PSA, 2015)

BSP (Q1 2018)
BSP MSME INITIATIVES

1 Microfinance as an innovative product for the unbanked

and unserved

Cash flow based lending and the determination of

2 capacity to pay
(Circular 855)

3 Viable financing services to agri value chain players

(Circular 908)

4 Credit enhancement through the Credit Surety Fund (CSF)

STRATEGIC PARTNERSHIPS

Citi Microentrepreneurship Awards

The CMA recognizes outstanding

microenterprises in the Philippines. Over a
hundred microentrepreneurs have been
recognized since the launch of the annual
search in 2002.
STRATEGIC PARTNERSHIPS

Expansion of Go Negosyo Ecosystem

The prospective partnership aims to leverage

the Negosyo Center network and create a
broader financing ecosystem for MSMEs.
www.bsp.gov.ph