Healthy, strong financial sector in 2010-2012, says Socioeconomic Report NEDA—GOV’T TO AGGRESSIVELY EXPAND PEOPLE’S ACCESS TO FINANCIAL SERVICES IN THE MEDIUM TERM

MANILA—The first two years of the Aquino administration saw a healthier and stronger financial sector, and the government will be more aggressive in expanding access by Filipinos to these services in succeeding years, according to the National Economic and Development Authority (NEDA).

Citing the Socioeconomic Report (SER): 2010-2012 recently released by NEDA, Socioeconomic Planning Secretary Arsenio M. Balisacan said that the financial sector has done very well in terms of attaining its targets as set out in the Philippine Development Plan (PDP): 2011-2016.

“In fact, some of the major targets that were planned to be attained in 2016 had already been achieved before the end of 2012.  For example, the number of bank offices per city or municipality now averages at six, and we still see it expanding.   The amount of microfinance services, already at PhP7.6 billion, is above the 2016 target,” said Balisacan.

The Cabinet official, who is also NEDA Director-General, said that the government will now focus on aggressively expanding people’s access to financial services.

“According to the SER, only about 41 out of 100,000 Filipinos own a deposit account, and this is still far from the target of 750 by 2016.  To further expand client reach in the countryside, market participants and regulators alike have to innovate and foster strategic partnerships,” he said.

Despite the global economic slowdown, Balisacan noted that the Philippine banking system continues to be on its growth trajectory because of sustained implementation of financial sector reforms and banks’ prudent risk-taking activities

“The SER details the situation of the country’s banking sector, with stronger bank balance sheets, higher core earnings, leaner bank structure, and wider service network.  Strong asset growth was also noted in our cooperatives,” said Balisacan.

According to the SER, there were 7,565 more cooperatives established in 2011 alone.  Overall, there were already 20,792 cooperatives by the end of 2011, with three out of four being micro cooperatives, or those with an asset size of PhP3 million and below.

The SER also reported that the country’s financial inclusion agenda has been recognized by international institutions.  In 2010, the Economic Intelligence Unit (EIU) rated the Philippines as the best in overall regulatory environment for microfinance among 54 countries.  The country ranked first in the categories of regulatory framework, general investment climate, and institutional development.  In 2011, it continued to rank the Philippines first in the regulatory framework and practices category.

The SER is an assessment of the first two years of the Aquino administration in relation to the targets and strategies set in the PDP 2011-2016.

M.R. No. 2013-023                                                                                

18 February 2013