The Philippines has shown no improvement in its financial inclusion score following a global review, resulting in a one-notch drop in its ranking.
In the Economist Intelligence Unit (EIU)’s newly released “Global Microscope 2018” report, the Philippines was still named as a global financial inclusion leader.
The country’s score of 72 out of 100 — the same as India’s — was unchanged from last year, which led to a rankings drop to fourth — one notch lower from last year — among the 55 economies reviewed.
The Philippines and India followed first-placed Colombia, second-ranked Peru, and Uruguay that was in third.
The EIU, nevertheless, stressed that the Bangko Sentral ng Pilipinas (BSP) “has been ahead of the curve in identifying opportunities and setting guidelines for financial inclusion.”
It said the central bank’s focus on creating a digital finance ecosystem had led to the introduction of a sound payments infrastructure that was helping various players reduce costs and further their outreach.
Financial inclusion enablers such as enhanced regulations covering pawnshops and money service businesses, and cash agents and branch-lite units were also cited.
“The BSP identifies risk based on a model and then regulates proportionately. Its collaboration with several industry players also acts as an enabling factor,” it added.
The report, however, said that the limited size of financial institutions was a key hurdle for financial inclusion.
“The focus of these financial institutions (including non-banks) on compliance with BSP guidelines has limited their efforts to expand their outreach,” it added.