DAVAO CITY—The Department of Finance (DOF) is pushing a trio of initiatives to enable the rural banking system to meet the challenge of reducing the number of "unbanked" Filipinos, given that this sector is at the frontline of the Duterte administration’s efforts to attain financial inclusion.
Finance Secretary Carlos Dominguez III said the reality is that a majority of Filipinos remain unbanked to this day even when the economy is growing at a fast pace is “not a good indicator,” as this means they have neither access to financial services nor ways to participate in investments.
The finance department with the help of the Bangko Sentral ng Pilipinas (BSP) and state-owned banks, are finding ways to relax requirements for deposits, introduce new financial products and increase the use of new technologies for electronic payments systems to help rural bankers in their “urgent” mission of reducing the number of unbanked Filipinos, especially in the countryside, he explained.
Dominguez said he is hoping that rural bankers would be at the forefront of national efforts to adapt to technological change, as this development would “immeasurably contribute to the dramatic transformation of our economy.”
“Technological changes will revolutionize the way we do banking. I urge you to embrace the changes that are forthcoming. This revolution in the financial sector will power our economic growth and help us be competitive into the future,” Dominguez told members of the Rural Bankers Association of the Philippines (RBAP) during the organization’s 65th national convention held at the SMX Convention Center here.
Also present at the gathering were Davao City Mayor Sara Duterte Carpio, Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla, Jr., Land Bank of the Philippines (LandBank) president Alex Buenaventura, Philippine Deposit Insurance Corporation (PDIC) president Roberto Tan, RBAP president Giovanni Gabriento, Rural Bankers Research and Development Foundation Inc. (RBRDFI) chairman Antonio Pasia, RDRDFI trustee Vittorio Almario, and Ives Nisce, chair of the RBAP Electoral Board.
To enable micro, small and medium enterprises (MSMEs) and millions of unbanked Filipinos to take advantage of the economy’s rapid growth, Dominguez said the DOF is pushing the congressional approval of the Secured Transactions Reform Bill, also known as the Financial Inclusion Bill, that would increase the use of technology in rural lending, and enable farmers and countryside entrepreneurs to tap their warehouse receipts, farm equipment and other forms of property as collateral to access credit.
On top of this measure, which has been included in the list of priority bills of the Legislative-Executive Development Advisory Council (LEDAC), the DOF is also pushing the development of a fully automated credit information system, which is almost fully established and undergoing final tests.
This system will equip financial institutions with a modern centralized credit registry under the Credit Information Corporation to facilitate lending activities, Dominguez said.
Moreover, the BSP has reactivated its Consolidation Program for Rural Banks to encourage mergers and consolidation of rural banks and further strengthen the country’s banking industry.
“I encourage all of you to take a closer look at this program, appreciate the synergies and economies of scale that integration will foster. It will make possible the most efficient use of the common infrastructure, systems, and resources of the smaller banks,” Dominguez told RBAP members during the event. (PR)
