By ALFREDO P HERNANDEZ
A MAMBULAOAN represented the Philippines in the global economic meet held in Myanmar last month where he discussed the government’s strategy in providing access to the unbanked sector to various financial services.
Jun Espana, a senior vice-president with the Pag-Ibig Funds (Pag-Ibig), was a panelist on one of the sessions of the 2013 World Economic Forum held recently in Myanmar.
It is an annual forum attended by the world’s heads of states and their economic ministers.
President Benigno Aquino III attended this event with his economic team.
Espana discussed with a panel how the Philippine government through the schemes laid down by the Central Bank of the Philippines was able to extend financial access to the country’s unbanked sector.
He was referring to one strategy called micro-financing, which is now widespread across the Philippines involving rural banks, non-governmental organizations (NGOs) and cooperatives.
Small cooperatives and NGOs play an active role in catering to the financing needs of the lower income group.
The microfinance scheme has helped many unbanked Filipinos to gain steady source of livelihoods, which overtime enabled them to access the financial services offered by formal lending institutions.
Also gaining popularity is the mobile banking, which largely benefited many low-income Filipinos.
At present, there are only three out of 10 Filipinos who have a bank account at a formal financial institution due to steep deposit requirements and the absence of banks in remote areas.
However, this was solved with the coming of mobile banking initiated by some telecom companies, allowing more and more unbanked Filipinos to access the services of lending institutions.
While many of the Filipinos don’t have bank accounts, they have mobile phones with which to do their banking.
An ADB study titled “Microfinance development Strategy 2000” showed that six countries including the Philippines account for about a third of the world’s global microfinance portfolio.
The other five are Cambodia, Pakistan, Papua New Guinea, Uzbekistan and Vietnam.
The study showed that as of 2010, there were 45 microfinance institutions in the Philippines, accounting for US$920 million in total assets and a gross loan portfolio of some US$632 million that covers some three million borrowers.