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

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A security guard stands at an entrance to the Philippine central bank headquarters in Manila, on December 14, 2021. Financial digitalisation had been high on the agenda of the central bank even before the pandemic hit. Photo: Bloomberg

Benjamin E. Diokno

Dr Benjamin E. Diokno is governor of the Philippine central bank (Bangko Sentral ng Pilipinas).

Published: 12:30pm, 9 Jan 2022

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.

The events of 2020 are a wake-up call for financial policymakers and the banking sector. Across Asia, digital banking is the low-hanging fruit that could dramatically improve economic resilience, increase financial inclusion and lift millions out of poverty.

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.