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Digital Technology, Key to Philippine Financial Inclusion

Digital Technology for Financial Inclusion in Philippines

During a recent meeting with the Department of Finance Secretary Carlos Dominguez III, World Bank President David Malpass shared that the robust economy of the Philippines offers many opportunities for the government to “re-guide” its digitalisation efforts to empower Filipinos.

According to a recent press release, the Bank is encouraging innovations using digital technology to expand financial inclusion in the Philippines.

Digital Technology is Key

  • The Philippines was commended for its efforts to kick-start its digitalisation program with the passage of a National Identification (ID) Law, which aims to unify and streamline an identification system for all Filipino citizens.
  • According to the President, the use of new technologies, particularly digital currency and remittances, can open new avenues for marginalised sectors to participate in the economy.
  • Secretary Dominguez welcomed the support of President Malpass for digitalisation as a way to expand financial inclusion in developing economies.
  • He explained that the Philippine government has long been implementing a conditional cash transfer (CCT) program, in which the lowest-income households in the country receive cash grants on condition that they fulfil certain conditions.
  • These conditions include ensuring that their children go to school or that pregnant mothers get regular medical check-ups.
  • This CCT program has worked pretty well because of the assistance extended by the World Bank and the Asian Development Bank (ADB) to the government.
  • Additionally, the passage of a national ID Law, which will be implemented on a pilot basis starting the first quarter of next year, will significantly improve the delivery of the CCT program.

Forms of Assistance

  • According to World Bank Country Director for the Philippines, the multilateral institution is providing technical assistance to the Philippines for the rollout of its national ID system.
  • During the meeting, the Bank’s Regional Vice President for East Asia and the Pacific region informed the Secretary of the institution’s new policy, which supports the reform initiatives of the Philippines in enhancing its fiscal stability, global competitiveness, and economic resilience.
  • President Malpass also said during the meeting that the World Bank’s coordination with ADB has now improved following the Secretary’s suggestion to reduce the duplication of efforts between the two institutions and instead work closely in order to effectively deliver development aid to the region.
  • Secretary Dominguez further suggested that the World Bank modify its timeline in coming up with its Country Partnership Framework (CPF) with the Philippines.
  • This is so that the institution’s assistance strategy would be in sync with the entry of new administration starting in 2022.
  • During the meeting, Secretary Dominguez also briefed President Malpass and other World Bank officials on the progress of the current administration’s tax reform and infrastructure modernisation programs.
  • He also shared about the country’s steadily rosy prospects for growth this year amid the global economic slowdown.
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