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Philippines Needs Stronger Agriculture and MSME Sectors to Boost Economy
The country’s agriculture and micro, small, and medium-sized enterprise (MSME) sectors are facing significant challenges that hinder their growth and productivity. One major obstacle is the lack of formalization and financial management capabilities, which limits bankability.
Limited Adoption of Digital Financial Services
According to a recent report, the Philippines ranked 5th among Southeast Asian countries and 72nd globally in terms of mobile internet speed. This poor connectivity has contributed to the limited adoption of digital financial services (DFS) by many Filipinos.
Importance of Financial Inclusion
The Philippine government recognizes the importance of financial inclusion in achieving national development goals. The National Strategy for Financial Inclusion (NSFI), launched in 2015, aims to accelerate financial inclusion and promote financial resilience among individuals, households, and enterprises.
Updating the NSFI
Recently, the Financial Inclusion Steering Committee (FISC) decided to update the NSFI to reflect significant developments since its launch six years ago. The updated strategy is expected to be more focused, targeted, and prioritized, taking into account the needs of various stakeholders, including consumers, MSMEs, and government agencies.
Key Features of the New NSFI
- Defines four desired outcomes as pathways to achieving the vision
- Pursues four strategic objectives with priority initiatives identified
- Reflects key beliefs and assumptions about financial inclusion
- Recognizes the importance of financial safety nets facilitated by government programs
The updated NSFI is expected to promote a more inclusive financial system that benefits all Filipinos. It will serve as a six-year blueprint to achieve financial inclusion and promote broad-based growth and financial resilience.
Stakeholder Consultations
The BSP, as FISC Secretariat, conducted stakeholder consultations with representatives of 125 organizations from various sectors, including consumer groups, basic sectors, MSMEs, social development agencies, LGUs, the financial services industry, and the academe. Nearly 300 people participated in the series of meetings held from November to December 2021.
ADB Support
The Asian Development Bank (ADB) provided support in the updating of the NSFI. ADB consultants facilitated stakeholder consultations and provided inputs to the drafting of the strategy as well as to the design of the monitoring and evaluation framework.
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