The pandemic may have brought a negative impact on global health and economies, but it also presented opportunities to some -- such as for businesses to rethink their strategies, and for customers and employees to embrace a new method of engagement.
At the peak of the coronavirus outbreak in 2020, the country saw a rapid growth in the e-commerce industry as people switched to a safer and more convenient way of purchasing goods.
For this year alone, a study by Statista said that the e-commerce industry in the Philippines is projected to increase to US$20.18 billion, and further by 17 percent in 2025.
The rise of the e-commerce industry created a domino effect on the financial industry, having recorded a rise in the number of banked Filipinos. This was supported by the emergence of digital banking that has gained ground amid electronic payments and digital financial services’ increasing volume and value.
According to data from the Bangko Sentral ng Pilipinas (BSP), 23 percent of the Filipino adult population is now banked, up from only around 13 percent in 2019.
Even more notable is the increase in the number of banked Filipinos with e-wallet accounts. From a mere 8 percent in 2019, the number of e-wallet users has gone up to 36 percent.
Reports said millennials and the Generation Z, which comprise 70 percent of the Philippine population, are among the driving forces behind this e-wallet adoption.
Then there are the e-wallets that have further evolved, offering more services and solutions for Filipino customers. One example is Maya Bank Inc. (MAYA), formerly PayMaya Philippines, which recently integrated its all-in-one money platform under Maya app, combining the best of e-wallet, crypto, and digital banking.
Maya offers an interest rate of as much as 6 percent per annum—markedly higher than interest rates offered by any traditional bank. Since its launch five months ago, it has since registered 1 million subscribers and achieved PHP10 billion worth of deposits.
Apart from Maya, five more digital banks have secured a license to operate from the BSP, namely Overseas Filipino Bank Inc., UNOBank Inc., UnionDigital Bank Inc., Tonik Digital Bank Inc., and GoTyme.
The continuing digitalization in the country and its positive reception means that it is here to stay. According to a survey by finder.com, Filipinos with digital bank accounts will account for 33 percent of the adult population by 2027. On average, 34 percent of people worldwide will have a digital bank account within the next five years, up from an average of just 19 percent in 2022.
In the context of the rising inflation, there is a huge opportunity for the banking industry to ramp up on education and financial literacy. Without the basic know-how on managing finances, people will be more at risk of making wrong decisions on how and where to save and invest their money. In fact, this concept should be introduced in early childhood education, to provide for a strong foundation on money management.
Through an effective financial literacy program, Filipinos will be able to make sound financial decisions, avoid incurring debt, and achieve financial goals. Understanding how finances are ably handled is also a need that was highlighted during the pandemic, with people going through unexpected financial challenges triggered by health emergencies, job loss, business shutdown, among others. Those who were financially knowledgeable and prepared for any eventualities were able to survive and even thrived.
Aside from education, the government must also put in place a solid regulatory framework on the new technologies in the financial sector to reduce uncertainties and most importantly, protect consumer welfare. There are many Filipinos who are still trying to understand the basics of monetary management and might fall prey to con tricks in the guise of tech innovations.
At the end of the day, there should be a check and balance, with leaders in government and in the private financial sector going back to what matters most in espousing innovation- enhanced experiences for businesses and consumers that make lives easier and more productive.
Editor’s note: The opinions expressed in the foregoing article are solely the author’s and do not reflect the opinions and beliefs of the Philippine News Agency (PNA) or any other office under the Office of the Press Secretary.