Scaling up Financial Services for Better Financial Health in the Philippines

UNSGSA Queen Máxima and Governor of Bangko Sentral ng Pilipinas (BSP), Dr. Eli M. Remolona, conclude a roundtable session with a press conference for national and international media, 29 May 2024. Photo credit: Patrick van Katwijk

Queen Máxima first visited the Philippines as the UNSGSA in 2015, when the country launched its first National Financial Inclusion Strategy. Since then, the Philippines have made substantial strides in financial inclusion, with adult bank account ownership climbing from 26.6% in 2011 to 51.4% in 2021, according to the World Bank Global Findex. Despite this progress, approximately 37.6 million Filipinos remain unbanked, placing the country among the top 10 globally with the highest number of unbanked adults.

This is due, in part, to geography. The country consists of around 7,000 islands, many of which are sparsely populated and difficult to reach. And, they often lack telecom connectivity. For financial institutions, it is therefore difficult and not lucrative to provide services. As a result, low-income communities, small-scale businesses, smallholder farmers, fishing communities, and women are left without secure, affordable financial services.

Global Findex data also highlights pressing concerns about financial resilience among Filipinos. The primary financial worry for 42% of adults is covering medical costs in the event of a serious illness or accident, followed by concerns over managing monthly expenses (24%) and securing funds for old age (17%). The importance of financial health was underscored by the COVID-19 pandemic, with 68% of adults very worried about facing severe financial hardship.

From 21–23 May 2024, H.M. Queen Máxima visited the Philippines. The focus of the visit was on strengthening the building blocks of financial inclusion, including connectivity, cybersecurity, and digitization, alongside enhancing financial health and resilience against economic and climate-related challenges.

The Special Advocate engaged in a range of meetings with key public and private sector leaders, including with President Ferdinand R. Marcos Jr., Secretary of the Department of Finance (DOF) Ralph G. Recto, and Bangko Sentral ng Pilipinas (BSP) Governor Dr. Eli M. Remolona Jr., and several government ministers. These discussions aimed to foster partnerships and support continuous innovation in the financial sector. She participated in three roundtable discussions during her visit, one of which focused on open finance with leading regulators, including Governor Remolona Jr. and leaders from major financial institutions and other government departments, during which Queen Máxima emphasized safeguarding the privacy of customers, securing data, and preventing the exclusion of people who are not using open finance. She also met with Asian Development Bank (ADB) President Masatsugu Asakawa to explore emerging priorities and opportunities for regional collaboration.

In Manila and surrounding areas, the UNSGSA conducted field visits to meet financial services users and observe innovations in improving financial health. One notable visit was to a fisherfolk community on Talim Island, where Queen Máxima explored financial solutions tailored for remote islands by CARD MRI Rizal Bank Inc. and Pioneer Insurance. Thanks to these financial services and the construction of a new telecom tower, the people of Tamil Island are now able to handle their financial affairs on the island rather than taking a boat to the mainland. This is more practical, saves them time and money, and provides them with more development opportunities, contributing to their financial health. In Metro Manila, the UNSGSA learned about a tech-enabled platform, GrowSari, that empowers small ‘sari-sari’ (retail shop) store owners by helping them grow their businesses, digitize their operations, and integrate in larger supply chains.

At Maya Bank, the UNSGSA led a roundtable discussion on the role of digital banks in measuring and supporting their customers' financial health and joined a focus group discussion with a small and diverse group of women who provided insights into how financial products can better address women's needs and enhance their financial health. Another highlight was attending a demonstration of Co-Develop’s South-East Asia Center for Digital Public Infrastructure (DPI) at Ateneo University. Co-develop is a technical resource lab where public and private Philippine institutions can work together to improve digital public services and test them in a secure and responsible environment to, among other things, foster financial inclusion.

Throughout her visit, the UNSGSA emphasized the pivotal role of financial services in improving economic prospects and quality of life, particularly for underserved communities. She also highlighted the need for affordable financial services, especially crucial for the Philippines’ many small islands, and encouraged authorities to build on the Philippines’ strong commitment to financial inclusion and ensure that access to financial services results in improved financial health across the country.

grow sari
UNSGSA Queen Máxima meets with Aubrey Udag, a GrowSari client, in Manila on 21 May 2024. GrowSari provides affordable products, e-business solutions, and financial services that are helping sari-sari stores to thrive. Photo: Patrick van Katwijk

Client Stories

Empowering Local Commerce: Fintech GrowSari’s Digital Platform Gives Boost to Small Merchants in the Philippines

Financial Innovation: Transforming the Lives of Remote Island Residents in the Philippines

Key Priorities

Based on lessons from her field visits, bilateral and roundtable meetings, and insights from her delegation, the UNSGSA suggested six short-term priorities to accelerate progress on financial inclusion and support the scaling up of services for better financial health across the Philippines.

1. Supporting the development of financial health metrics.

2. Improving connectivity and making it more affordable.

3. Deploying digital IDs for all and ensuring their acceptance by financial institutions.

4. Digitizing public salaries, payments, and transfers.

5. Ensuring the full and affordable interoperability of the payment system and zero-cost person-to-person (P2P) and person-to- merchant (P2M) transactions.

6. Implementing open finance with strong participation, low costs, standardized APIs, and strong governance and data protection.

UNSGSA Partners in the Philippines

UNSGSA Reference Group members supporting this mission included the Alliance for Financial Inclusion (AFI), the Better than Cash Alliance, the Consultative Group to Assist the Poor (CGAP), and the World Bank.