18 Feb 2020

The Bangko Sentral ng Pilipinas (BSP) and the Philippine Government recognize digital payments as a policy priority to enable Filipinos to seize the opportunities of the digital revolution.

The Philippines was a global early-mover in digital payments, with the launch of mobile money in 2001. However, as in most countries, the path to widespread adoption and usage has not been straightforward. The first Better Than Cash Alliance diagnostic on the state of digital payments in the Philippines (released in 2015) found that adoption had been limited. The first diagnostic estimated that the share of digital payments in the Philippines was only about 1% by volume (26 million out of 2.5 billion payments per month).

Recognizing that digital payments are an enabler and driver of digital transformation, the BSP set a target of driving the share of digital payments to 20% by 2020. The BSP considers that 20% could be the tipping point, after which the country could expect faster growth in digital payments. The BSP further set out a vision for modernizing the retail payment system, pushing a number of significant regulatory reforms. In turn, the Philippine Government has led by example, becoming the most digitized stakeholder in the ecosystem, with 64% of all government transactions carried out digitally.

Originally published on BTCA’s website

Building a Secure and Inclusive Global Financial Ecosystem

08 Sep 2017

The 2017 Brookings Financial and Digital Inclusion Project (FDIP) report evaluates access to and usage of affordable financial services by underserved people across 26 geographically, politically, and economically diverse countries. The report assesses these countries’ financial inclusion ecosystems based on four dimensions of financial inclusion: country commitment, mobile capacity, regulatory environment, and adoption of selected traditional and digital financial services.  The report further examines key developments in the global financial inclusion landscape, highlights selected financial inclusion initiatives within the 26 FDIP countries over the previous year, and provides targeted recommendations aimed at advancing financial inclusion.

Corporate and SME experiences of digitizing business payments in the Philippines

15 Jul 2015

The BTCA Country Diagnostic for the Philippines, completed in 2013, found that while many medium and large businesses paid their employees digitally, very few business-to-business payments were made digitally.

This case study builds the evidence base regarding business payments in the Philippines, the incentives businesses face, and what it would take to shift corporates decisively to digital payments. The case draws on in-depth interviews with commercial banks and Filipino corporates, complemented by a survey of 400 small businesses employing between 2 and 25 people in Metro Manila in 2014.

While the Philippines payments system offers digital payment instruments like inter-bank electronic credit and debit transfers, checks remain by far the most widely used interoperable payment instrument. Instead of using electronic inter-bank transfers, businesses tend to open multiple bank accounts with different banks and then initiate on-us payments to suppliers at their own banks. One of the Philippines payment networks (BancNet) does offer low value credit transfers in real time between payment card accounts, but these are little used.

Improving Client Value from Microinsurance: Insights from Kenya, India and The Philippines

18 Jun 2015

The primary goal of the International Labour Organization (ILO) is to contribute with member States to achieve full and productive employment and decent work for all. The Decent Work Agenda comprises four interrelated areas: respect for fundamental worker’s rights and international labour standards, employment promotion, social protection and social dialogue. Broadening the employment and social protection opportunities of poor people through financial markets is an urgent undertaking.

Housed at the ILO’s Social Finance Programme, the Microinsurance Innovation Facility seeks to increase the availability of quality insurance for the developing world’s low-income families to help them guard against risk and overcome poverty. The Facility, launched in 2008 with the support of a grant from the Bill & Melinda Gates Foundation, supports the Global Employment Agenda implemented by the ILO’s Employment Sector.

Research on microinsurance is still at an embryonic stage, with many questions to be asked and options to be tried before solutions on how to protect significant numbers of the world’s poor against risk begin to emerge. The Microinsurance Innovation Facility’s research programme provides an opportunity to explore the potential and challenges of microinsurance.

The Facility’s Microinsurance Papers series aims to document and disseminate key learnings from our partners’ research activities. More knowledge is definitely needed to tackle key challenges and foster innovation in microinsurance. The Microinsurance Papers cover wide range of topics on demand, supply and impact of microinsurance that are relevant for both practitioners and policymakers. The views expressed are the responsibility of the author(s) and do not necessarily represent those of the ILO.

How to Develop an Institutional Code of Ethics

06 May 2014

The Smart Campaign’s client protection principle on Fair and Respectful Treatment of Clients encourages financial service providers to treat clients with fairness and respect and to ensure that measures exists to detect and correct corruption and abuse, particularly during the credit sales and collection processes.

An institutional Code of Ethics helps employees practice fair and respectful treatment of clients by defining clear standards of ethical behavior that they must uphold. A written Code does not ensure ethical conduct, but it is the first step toward creating an ethical organizational culture. In other words, establishing high standards of ethical employee behavior is a two-part process; first, the institution defines standards of behavior, and second, those standards are brought to life throughout the institution. This guide will focus on the first part of the process—defining standards of behavior through a formal Code of Ethics.

Most microfinance institutions already have a Code of Ethics, but many of these Codes are not “living” documents that carry significance within the organization. This short guide provides concrete suggestions for creating or remaking an institutional Code of Ethics.

Ethical Staff Behavior at Alalay Sa Kaunlaran, Inc. (ASKI)

05 May 2014

With limited financial resources and few service options, microfinance clients are particularly vulnerable to corruption and unscrupulous business practices. The principle of ethical staff behavior aims to ensure that financial service providers maintain high ethical standards in their interactions with microfinance clients. Adequate safeguards must be in place to detect and correct corruption from staff or mistreatment of clients.

Developing and maintaining an ethical corporate culture requires that an organization clearly state its values and ethical standards through a Code of Conduct. Management and staff at all institutional levels must be trained on ethical behavior and receive appropriate rewards and sanctions for their ability or failure to comply.

Alalay Sa Kaunlaran, Inc. (ASKI), a microfinance institution in the Philippines, believes that ethical staff behavior is a critical component of both good customer service and human resources management. ASKI implements their written Code of Conduct and Discipline through staff training, staff performance reviews,client satisfaction surveys, and the ASKI Values Protocol—an established process for addressing staff violations of the Code.

Beyond Codes: The Foundation for Client Protection in Microfinance

02 May 2014

Beyond Codes was an action research project of the Center for Financial Inclusion at ACCION. The project was designed to provide a body of experience and knowledge from leading financial institutions serving low-income people about how consumer protection codes of conduct are implemented. The two-year project started in mid-2008 and ended in June 2010. The project aimed to develop the tools and experience that could inform the subsequent work in client protection by grounding it in practices of financial institutions.

Twelve financial institutions (FIs) participated in the project. FIs were of various ages, from less than three to more than ten years. The institutions included banks, non-deposit finance companies, NGOs, and credit unions. Some were large operations with close to one million clients, while others were medium-sized and even small, with fewer than 10,000 customers. The countries represented in the research were: Bosnia, India, Kenya, Mexico, and the Philippines. All the FIs engaged in lending including a range of loan products using various methodologies. More than half also offered savings, transaction accounts, and insurance.