The Asian Development Bank (ADB) has approved a $300- million loan to support reforms that will boost financial inclusion in the country.
ADB’s Inclusive Finance Development Program, Subprogram 3 supports efforts to increase the capacity of financial service providers, including rural banks and nonbank financial institutions, to offer quality products and services accessible through various delivery channels.
“Through this loan, ADB is expanding its partnership with the Philippines in ensuring all Filipinos will have access to financial products and services, including via digital platforms, to help improve their lives and livelihoods,” Kelly Hattel, ADB senior financial sector specialist, said in a statement yesterday.
“Considering the significant impact of climate change on the vulnerable segments of the population, the reform actions supported by the loan will ensure government assistance can reach people faster during crises and emergencies; help raise climate resilience of farmers and micro, small and medium-scale businesses through expanded insurance; and promote improved financial stability,” Hattel added.
Key reforms pursued by the government to eliminate barriers to access financial services and mainstream gender across its policies include updating and providing action plans for the National Strategy for Financial Inclusion 2022-2028.
The Philippines also passed and implemented key legislation on financial consumer protection under the Financial Products and Services Consumer Protection Act, and rules encouraging digital platforms to provide financing to agriculture value chain members in support of the Agriculture, Fisheries and Rural Development Financing Enhancement Act 2022.
The government also implemented a regulatory sandbox framework for financial solutions to test new business models and facilitate the adoption of innovative technology approaches.
The new loan builds on ADB assistance provided under the Inclusive Finance Development Program Subprogram1 and Subprogram2 delivered in October 2018 and August 2020, respectively.
The multilateral agency said reforms pursued under this loan will complement other ADB programs in the Philippines, such as the Competitive and Inclusive Agriculture Development Program Subprogram2 approved in January 2023.
