BSP works on financial inclusion initiatives after UNSGSA visit

The Bangko Sentral ng Pilipinas (BSP) is ramping up its financial inclusion efforts by exploring uses for Open Finance, measuring financial health, collecting data on the pricing of digital payments, and supporting a legislative measure on internet access.

These are priority initiatives that the BSP and the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA), Her Majesty Queen Máxima of the Netherlands, discussed during her official visit to the Philippines from 21 to 23 May 2024.

BSP will explore Open Finance use cases that promote financial health, which includes enabling consumers to seamlessly open savings, insurance, pension, and retirement accounts.

Open Finance supports financial inclusion by leveraging on data that consumers agree to share with financial institutions (FIs) and third-party providers to develop innovative financial solutions and tailor-fit products and services to their needs.[1]

The BSP is also developing an index that will allow it to measure and formulate policy interventions on financial health. The index will be aligned with the UNSGSA’s definition of financial health.

Aside from these, the BSP has engaged Innovations for Poverty Action[2] to conduct a pilot study on responsible pricing, which will determine the measures on the reasonableness of fees, charges, and interest rates imposed by financial service providers on their products. This is in line with the principles under the Financial Products and Services Consumer Protection Act of 2022.

To ensure the affordability of financial products, the central bank will also continue discussions on taxes on digital transactions with the Department of Finance.

Moreover, the Financial Inclusion Steering Committee (FISC) chaired by the BSP will continue supporting the passage of the Open Access in Internet Services Act, which is currently pending in Congress.

Aside from enhancing web access for the unbanked populace in remote areas of the country, the proposed law is expected to promote broad-based access to welfare-enhancing digital financial services.

These initiatives are expected to result in onboarding more Filipinos into the formal financial system for them to reap the benefits of a growing economy.

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[1] https://www.bsp.gov.ph/Pages/InclusiveFinance/Open%20Finance/Open%20Finance.aspx

[2] Innovations for Poverty Action is an international nonprofit dedicated to fighting global poverty through research and policy initiatives (https://poverty-action.org/what-we-do)