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The Philippines to Further National Financial Literacy

Governor of the Bangko Sentral ng Pilipinas (BSP) Benjamin Diokno emphasised the importance of improving Filipinos’ financial literacy, particularly now that digital transactions are on the rise, emphasising not only the benefits to people but also to the economy.

Diokno said the central bank and its private-sector partners want to supplement traditional financial literacy programmes with digital skills-building to boost financial resilience. In his speech at the virtual 4th Financial Education Stakeholders Expo held recently, he said a financially resilient citizen can be more productive, and contribute more meaningfully to nation-building, he said.

He went on to explain that the pandemic improved Filipinos’ financial behaviour since more individuals are now saving, purchasing health and life insurance, and planning for retirement due to the pandemic. Diokno stated contributions to the Personal Equity and Retirement Account (PERA) increased from 1,388 in 2019 to 2,671 in 2020, citing statistics from several sources. In addition, the number of life insurance accounts in 2019 was 39.1 million, up from 43.5 million the year before.

Non-life insurance coverage increased from 9.8 million in 2019 to 30.3 million in 2020. Prior to the pandemic, roughly 48% of Filipinos who participated in the central bank’s financial inclusion survey indicated they had savings, but that number rose to 53% in 2019.

Around 18% of respondents stated they save in banks, up from 18% in 2018 to 21% in 2019. According to Diokno, according to a 2015 World Bank (WB) survey on adult financial literacy, Filipinos have the lowest financial literacy in the region, at 25%, compared to 59% in Singapore, 52% in Myanmar, and 36% in Malaysia, among others.

He said that only three out of seven financial literacy questions were correctly answered by Filipino respondents and that inflation, interest computation, and simple division were all underperforming. These findings are supported by related central bank studies, which show that five out of ten persons retain their funds at home and five out of ten take out loans from informal money lenders.

He also said that “one in every 100 Filipinos has been victimised by investment scammers, amounting to a total loss of over PHP25 billion.” “These experiences tell us that there is still a long way to go. Many Filipinos are still delaying saving, mismanaging credit, bypassing legitimate investment opportunities, or falling victim to investment scams,” he said. Thus, the government and the private sector have intensified their relationship to improve financial education and literacy among schoolchildren and adults in the Philippines.

OpenGov Asia reported various cross-border cooperation between the Philippines and Singapore have extended their fintech relationship, strengthening ASEAN regional payments and providing financial inclusion to Overseas Filipino Workers (OFWs) and micro-small-to-medium-sized businesses (MSMEs).

Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP) and Managing Director Ravi Menon of the Monetary Authority of Singapore (MAS) signed the expanded Fintech Innovation Function Cooperation Agreement during the recent World Fintech Festival Philippines (WFF) 2021 – Singapore Fintech Festival (SFF). The integration of the two countries’ QR and real-time payment systems was one of the highlights. The BSP stated that they are currently taking the first step in integrating the Philippine payment system with those of our ASEAN neighbours, beginning with Singapore.

Digital Pilipinas Convenor Amor Maclang expressed his support for the enlarged BSP-MAS Cooperation Agreement by emphasising a whole-of-society approach in addressing today’s and tomorrow’s technological demands. “We will continue to be at the service of both the BSP and the MAS since this agreement is a very essential pillar in tech-ing up our country,” said Maclang, who helped launch WFF 2021 with the MAS.

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