On Thursday, the Asian Development Bank (ADB) announced that it has authorized a loan of $300 million to support the efforts of the Philippine government in improving the accessibility of financial services for vulnerable sectors.
The multinational financial institution announced that its Inclusive Finance Development Program (Subprogram 3) is aiding in the implementation of reforms to increase financial inclusion in the Philippines through enhancing financial infrastructure.
The program’s goal is to increase the capabilities of financial service providers, such as rural banks and nonbank financial institutions.
“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,” ADB Senior Financial Sector Specialist Kelly Hattel was quoted as saying in the statement.
According to Mr. Hattel, the changes backed by the ADB loan will guarantee that the government can provide aid to those who are most at risk during emergencies. It will also improve the ability of farmers and small to medium-sized businesses to withstand the impacts of climate change through increased insurance coverage.
According to data from the 2021 Global Findex Database, the percentage of adults in the Philippines who have accounts with financial institutions or mobile money providers increased from 34% in 2017 to 51% in 2021.
The government of the Philippines aims to increase the percentage of Filipinos who have accounts with financial institutions or mobile money providers to 70% by 2024.
As of September 1st, nearly 88% of the Philippine population is enrolled in the Philippine Identification System (PhilSys).
The recently authorized ADB loan is an extension of the initial and secondary subprograms of the ADB’s Inclusive Finance Development Program, which was introduced in October 2018 and August 2020, respectively.
The Philippines will receive a loan financing allocation of $4 billion from the ADB, which will be allocated to eight specific projects and programs.
The ADB was the leading source of active official development assistance in 2022, providing $10.85 billion, which made up 33.47% of the total amount.