Measuring Financial Health in the Philippines

 

Delivered at the Singapore FinTech Festival, a panel discussion highlighted the strides made by the Philippines in advancing financial health within its financial sector, shifting focus from inclusion to resilience and well-being.


Key Highlights

1. Financial Health as a National Priority

  • Central Bank of the Philippines (BSP):
    • Initially focused on financial inclusion to address a 29% inclusion rate pre-pandemic, now at 56%.
    • Updated the National Strategy for Financial Inclusion to prioritise resilience, recognizing vulnerabilities such as lack of savings, insurance, and exposure to climate change risks.
    • Financial resilience is now central to the BSP's vision of fostering long-term financial health.


2. The Role of Digital Banking

  • Maya Bank's Contributions:
    • Addressing critical gaps: Two-thirds of Filipinos lack savings accounts; only 1 in 10 micro-SMEs have access to credit.
  • Achievements:
    • Acquired close to 5 million customers within two years.
    • Mobilised over $500 million in deposits and disbursed $1.5 billion in loans.
    • Key innovations: Goal-based savings products that doubled customer savings within six months.
    • Advocacy: Leveraged BSP's digital bank framework to expand access and improve financial health for 120 million Filipinos.

 

3. Measuring Financial Health

  • BSP Financial Health Survey:
    • Developed a financial health index with 10 questions covering day-to-day needs, rainy-day readiness, financial goals, and confidence.
    • Results: A baseline financial health score of 58/100 for Filipinos, comparable to Brazil (57).
  • Key insights:
    • Lower-income populations, rural communities, youth, and farmers scored below the national average.
    • Resilience was the most challenging dimension, with lower-income groups borrowing to meet daily needs, increasing the risk of over-indebtedness.
  • Maya Bank's Measurement Efforts:
    • Collaborated with BSP and other digital banks to adopt a financial health index, surveying 1,500 respondents.
  • Findings:
    • While access to digital financial services is high, 65% feel financially insecure.
    • One-third of respondents struggle with basic needs and planning for the future.
    • Actionable insights: Maya Bank aims to address these gaps by designing solutions that target pain points and improve financial well-being.

4. Scaling Financial Health Innovations

  • FinTech Alliances and Standards:
    • Global collaboration led by FinTech Alliance Philippines and Asia FinTech Alliance aims to standardise financial health metrics across markets.
  • Focus areas:
    • Expanding digital payments adoption beyond 50% of transactions.
    • Increasing financial service access to 70% of Filipino adults.
    • Promoting cross-market learnings to replicate success stories globally.
    • Vision for the Future

 

Vision for the Future

  • Collaboration and Impact:
    • The Philippines’ financial sector aims to leverage surveys and insights to develop targeted solutions for underserved segments.
    • Sharing learnings across markets and scaling financial health metrics will set a global standard for innovation.


Conclusion
The discussion underscored the critical need for financial health as a complement to financial inclusion, with measurement and collaboration being essential to addressing systemic challenges. With regulators and providers driving innovation, the Philippines is poised to become a model for global financial health transformation.

 

Speakers:

  • Angelo Madrid, President, Maya Bank
  • Lito Villanueva, Chairman, Fintech Alliance Philippines, Chief Innovation & Inclusion Officer and EVP, RCBC, Asia Fintech Alliance
  • Mynard Mojica, Director, Financial Inclusion Office, BSP

 

Moderator:

  • Sophie Sirtaine, Chief Executive Officer, Consultative Group to Assist the Poor (CGAP)

 

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