We must leverage on this momentum to drive technology-driven financial inclusion not only by promoting use of digital financial services but also by increasing consumer trust and confidence.
…(W)e are harnessing the power of technology to improve our own consumer protection services through an enhanced Consumer Assistance Management System (CAMS) with Chatbot Functionality.
While it has thrown the world’s economies and daily life off-balance, the pandemic spurs us towards different, if not new and exciting directions.
Moving forward, we must look at every Filipino as a potential contributor to the revival of our economy. Each transaction, however big or small, will serve as a stepping stone leading towards recovery. Digitization can accelerate the integration of the excluded in the formal financial system and pump up economic activity.
Financial Inclusion and Capitalizing on the Great Digital Wave in the Time of Pandemic
BSP Governor Benjamin E. Diokno, July 1, 2020
The Bangko Sentral ng Pilipinas (BSP), aside from its vision, mission and core values, has declared in its Advocacies that it is “(d)eeply involved in various projects and activities to support the economic and social development objectives of the government through advocacy programs in financial inclusion, financial education and consumer protection, and overseas Filipinos’ remittances.”
As a true advocate of all that an emergent economy demands, and with the country, like the rest of the global economy, facing an uphill climb from the wreckage caused by the pandemic, the BSP celebrates its 27th year front and center of the country’s drive toward an efficient handling of the challenges of the times. Recovery from the present economic ordeals hinges on how the country seizes all the opportunities presented while determining the road to take that will benefit the Filipino.
In a speech titled “Road to Recovery: Turning Crisis Into Opportunities” at a recent business forum, BSP Governor Benjamin Diokno said that “(d)espite the bleak global picture, there is reason to be optimistic about the future of the Philippine economy.”
According to Diokno the agenda for reform put in place by the government during different administrations has set a more broad-based growth resulting in an annual growth that benefits the economy as it faces recent challenges. He said that foreign exchange reserves are healthy, public sector debt is low, external payments are manageable and the country’s credit profile is “solid”
As for banks, Diokno cited their strong capitalization and strong liquidity positions all resulting from progressive regulatory reforms set over the years.
The Governor also cited the recent survey by The Economist which said that “among 66 emerging economies, the Philippines is ranked the 6th most robust on the basis of four measures of financial strength, namely, public debt, foreign debt, cost of borrowing, and reserve cover.”
The crucible that is the coronavirus crisis has put everything to the test. The BSP for its part has “promptly implemented measures to ease liquidity and sustain the flow of credit that have calmed down market jitters,” Diokno said.
The Philippine economy should do better than many, but according to Governor Diokno, “our optimism is also tempered by a sense of realism that there are still much work to be done” as the “good head start with the economic and regulatory buffers built over the years…can be easily eroded given the huge resource requirement of the crisis response measures.”
“As we restart the economy…we continue to maintain a disciplined approach to policy coordination and decision-making,” he added.
Saying that the pandemic has “exposed the vulnerabilities and gaps in existing processes and systems,”he proposed a swift push for recovery efforts to regain the momentum lost due to the pandemic. Diokno said that he believes four critical structural reform imperatives should be taken: first, the modernization of the health system; second, the upgrade of the Information and Communication Technology (ICT) infrastructure system and processes; third, the modernization of Philippine agriculture and the government’s supply chain management system with the aid of digital technologies; and fourth, the development of a highly skilled and resilient workforce by strengthening the educational system, sustained upskilling, and adequate health protection to future-proof our workforce.
Diokno said that while the imperatives he outlined were outside of the mandate of the BSP, these have “profound impact on the realization of the BSP’s policy thrusts.”
But the BSP according to him has yet to exhaust all the “instruments in its toolkit to support the liquidity requirements of the economy,” should be up to the challenge that could arise, with due consideration to other expected conditions such as defaults and non-performing loans that could require debt restructuring measures.
With the change in human behavior due to the new normal, he said that the use of electronic payment and financial services over face-to-face transactions would call for expansion of reach in digital transactions, even the EGOv Pay Facility and the “speedy implementation of the national ID system will enable inclusive and innovative digital finance and ensure reliable database for the design and impact assessment of policies, including those for taxation and social support purposes.” (Note: The BSP has recently launched theirchatbot, BOB or the BSP Online Buddy, to improve Consumer Assistance Mechanism (CAM). By utilizing artificial intelligence (AI) and machine learning, BOB can respond in real-time and expedite the handling of consumer concerns, which Diokno said was in line with his personal mission to bring the BSP closer to the people.)
There remains a long list of reforms the country needs, but according to him, the pandemic is a time for learning, of “seizing opportunities to move forward,” adding that “There are deep learnings that we should collectively heed if we are to rise above the crisis and forge ahead towards the goal of a stronger and more inclusive society.” – DL Mayo.
