BSP ramps up financial inclusion initiatives

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has been ramping up its initiatives on financial inclusion by exploring uses for Open Finance, collecting data on the pricing of digital payments and backing a legislative measure on internet access.

In a statement, the BSP said these were the priority initiatives discussed with United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) Queen Máxima of the Netherlands during her official visit to the Philippines from May 21 to 23.

“BSP will explore Open Finance use cases that promote financial health, which includes enabling consumers to seamlessly open savings, insurance, pension, and retirement accounts,” the central bank said.

Earlier in June last year, the BSP and the International Finance Corp. launched the Open Finance PH Pilot to bring financial services to the unbanked, particularly helping those who lack documentation to build a financial profile and credit history.

The initiative is a collaborative undertaking of financial institutions, participating on a voluntary basis, to explore the use of Application Programming Interface technologies in the delivery of financial products and services.

It also leverages data that consumers agree to share with financial institutions and third-party providers to develop financial solutions and tailor-fit products and services to their needs.

“The BSP is also developing an index that will allow it to measure and formulate policy interventions on financial health. The index will be aligned with the UNSGSA’s definition of financial health,” the central bank said.

The BSP has also engaged with Innovations for Poverty Action, an international non-profit organization dedicated to fighting global poverty through research and policy initiatives.

The BSP said it is working with the organization to conduct a pilot study on responsible pricing of financial products, which will determine the reasonableness of fees, charges and interest rates imposed by financial service providers.

“To ensure the affordability of financial products, the central bank will also continue discussions on taxes on digital transactions with the Department of Finance,” the BSP said.

Furthermore, the Financial Inclusion Steering Committee chaired by the BSP will continue backing the passage of the Open Access in Internet Services Act, which is currently pending in Congress.

The Open Access in Data Transmission Act seeks to promote fair and open competition by lowering barriers to entry for the telecommunications industry in the Philippines.

It also aims to create the space that will empower as many different service providers as possible to build and operate data networks and give more choices to broadband users anywhere in the country, especially in the countryside.

“Aside from enhancing web access for the unbanked populace in remote areas of the country, the proposed law is expected to promote broad-based access to welfare-enhancing digital financial services,” the BSP said.

“These initiatives are expected to result in onboarding more Filipinos into the formal financial system for them to reap the benefits of a growing economy,” it added.