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PH Receives New $300M Loan From ADB

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Key Points

  • The Asian Development Bank (ADB) has extended another $300 million loan to the Philippines, its host country, this time to make financial services more accessible to Filipinos.
  • The ADB said in a statement on Friday that its policy support loan for the inclusive financial development program (subprogram 2) will be allocated for reforms aimed at achieving the government’s goals under the national financial inclusion strategy.
  • Launched in 2015, the Bangko Sentral ng Pilipinas national financial inclusion strategy “provides the national vision for financial inclusion and a platform for public and private sector coordination to ensure synergy of efforts in achieving shared objectives,” said Bangko Sentral ng Pilipinas Gov. Benjamin E. Diokno in a speech last month.
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Manila • The Asian Development Bank (ADB) has extended another $300 million loan to the Philippines, its host country, this time to make financial services more accessible to Filipinos.

The ADB said in a statement on Friday that its policy support loan for the inclusive financial development program (subprogram 2) will be allocated for reforms aimed at achieving the government’s goals under the national financial inclusion strategy.

“These measures will strengthen the institutional and policy environment for financial inclusion, improve financial infrastructure, and increase the capacity and reach of service providers, especially rural banks and non-bank financial institutions,” the Manila-based multilateral lender said.

Launched in 2015, the Bangko Sentral ng Pilipinas national financial inclusion strategy “provides the national vision for financial inclusion and a platform for public and private sector coordination to ensure synergy of efforts in achieving shared objectives,” said Bangko Sentral ng Pilipinas Gov. Benjamin E. Diokno in a speech last month.

However, the ADB noted that the Philippines had been among the ASEAN cellar-dwellers across all indicators of financial inclusion, citing findings from the 2017 Global Findex Survey.

“Only 34 percent of Filipino adults have an account at a formal financial institution, compared with 49 percent in Indonesia, 82 percent in Thailand, and 85 percent in Malaysia. The Philippines can expand financial access to poor Filipinos through credit, savings, insurance, pensions, and remittances,” the ADB said.

The latest ADB loan will specifically support financial inclusion programs conducted by the BSP, the Department of Justice, the Insurance Commission, Philippine Guarantee Corp., the Philippine Statistics Authority, and the Securities and Exchange Commission.

The main initiatives include the introduction of the country’s national identification scheme, the launch of agricultural value chain finance pilots, and crop insurance public-private partnerships.

“It also supports government reforms to incorporate financial literacy programs in the K-12 basic education curriculum and increase the use of digital payments. It will help reorganize and strengthen Philguarantee’s operations, expand coverage of the credit reporting system, promote use of cloud-based core banking technology among rural banks, and support the development of Islamic finance,” the ADB said.

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