Eye on Asia | Covid-19 has turbocharged digital banking in the Philippines. Now, for the region
- The pandemic cruelly exposed the costs of financial exclusion for millions of Filipinos but also catalysed financial digitalisation
- Countries in the region must work together to ensure that the benefits permeate borders
In 2020, Covid-19 exposed significant gaps in the financial services sector. As the virus ravaged communities, people in the informal and cash-reliant economy were the hardest hit. The cost of financial exclusion came to bear, and the bill was enormous.
Billions of people around the world do not have a bank account. They don’t have access to credit, ATMs, debit cards or savings accounts. When the pandemic struck, many of them suffered greatly as governments struggled to get cash subsidies to recipients quickly.
In the Philippines, financial digitalisation had been high on the agenda of the central bank even before the pandemic. We recognise the social dilemma and the opportunity for financial digitalisation: there are about 109 million Filipinos, of whom at least 70 per cent had access to Facebook but less than 30 per cent owned a bank account.
When I assumed my role as governor of the Philippine central bank in 2019, I set the goal of increasing the percentage of adult Filipinos with transaction accounts to 70 per cent by 2023.
My vision is a digital-heavy, cash-lite society – one where all citizens can enjoy the simple benefits of financial inclusion that many of us take for granted, such as loans and insurance, and one where small businesses can grow and thrive by accessing credit and other financial services.