National Strategy For Financial Inclusion: Background

National Strategy for Financial Inclusion
Background
In 2016, the Bangko Sentral ng Pilipinas spearheaded the implementation of the National Strategy
for Financial Inclusion (NSFI). The Office of the President issued Executive Order (EO) No. 208
on June 2016 to institutionalize the Financial Inclusion Steering Committee (FISC), the governing
body that provides strategic direction, guidance and oversight in the NSFI implementation -
developed through a consultative process, serves as guidepost for public and private sector
stakeholders to systematically accelerate financial inclusion in the Philippines. The issuance of the
EO represents another milestone in the countrys efforts to establish a financial system that
benefits all Filipinos, particularly the unbanked and underserved, and thereby contribute to
inclusive growth and development.
FISC Functions
Align various financial inclusion related policies and programs

Ensure effective monitoring of the progress of initiatives
Collaborate with public and private sector stakeholders on various agenda that fall
under the NSFI focus areas
The FISC consists of government agencies that are instrumental in crafting and implementing the
NSFI. The current FISC consists of fifteen (15) government agencies. Heads of other agencies
may be invited as members when necessary.
Chair and Secretariat Bangko Sentral ng Pilipinas
Members:
Commission on Filipinos Overseas

Department of Social Welfare and Development
Cooperative Development Authority
Department of Trade and Industry
Department of Agrarian Reform
Insurance Commission
Department of Budget and Management
National Economic and Development Authority
Department of Education
Philippine Deposit Insurance Corporation
Department of Finance
Philippine Statistics Authority
Department of Science and Technology
Securities and Exchange Commission
The FISC consists of government agencies that are instrumental in crafting and implementing the
NSFI. The current FISC consists of fifteen (15) government agencies. Heads of other agencies
may be invited as members when necessary.
National Strategy for Financial Inclusion
Financial inclusion or an inclusive financial system is defined as a state

wherein there is effective access to a wide range of financial products and
services by all.1 Financial inclusion is important for every household and business as
access to basic financial services such as savings, payments, credit and investments
makes a substantially positive difference in peoples lives. It is likewise considered as an
important element that can contribute to broad-based development and inclusive growth.
An inclusive financial system is not only pro-growth but also pro-poor with the potential
to reduce income inequality and poverty, and promote social cohesion and shared
economic development. Financial exclusion, on the other hand, leaves the disadvantaged
and low-income segments of society with no choice other than informal options, making
them vulnerable to financial distress, debt, and poverty.
Considering the importance and the multi-dimensional nature of financial inclusion, a

national strategy can help raise the level of awareness on financial inclusion issues, build
trust among various stakeholders, identify the best modalities for coordination, and
ensure relevance at the national level.
National Strategy for Financial Inclusion is a comprehensive public document developed

through a broad-based consultative process with private and public-sector stakeholders
involved in financial sector development to systematically accelerate the level of financial
inclusion in the country.2
In 2014, the Philippines ranked first in Asia and top three in the world in terms of having
a conducive environment for financial inclusion according to the Economist Intelligence
Unit (EIU) maiden survey on financial inclusion environments globally. Despite these
significant gains, access to financial products and services remains an important challenge
especially in an archipelago comprising 7,107 islands with a population of more than 100
million people. This problem presents both a challenge and an opportunity to ensure
effective access and use of available financial products and services.
The National Strategy provides therefore a framework to enable the government and
the private sector to take a coordinated and systematic approach toward a financial
system that is accessible and responsive to the needs of the entire population toward a
broad-based and inclusive growth, particularly, to ensure that this financial system also
serves the traditionally unserved or marginalized sectors of the population.
1
based on several internationally accepted definitions set forth by entities such as the World Bank (WB), the
Consultative Group to Assist the Poor (CGAP), and the Asian Development Bank (ADB), among others.
2
Adapted from the Alliance for Financial Inclusion (AFI)
The National Strategy for Financial Inclusion shall foster creation of a robust financial
inclusion database that will encourage and support evidence-based policymaking, enable
progress monitoring and facilitate evaluation of financial inclusion initiatives. All the data
and measurement initiatives shall be pursued in line with the following strategic
objectives. This is where PSA plays a large role:
1. Institutionalize measurement and reporting of financial inclusion indicators

based on international indicators, contextualized to domestic setting.
2. Address data gaps by identifying measures that are currently unavailable but
would be highly relevant for financial inclusion metrics.
3. Develop an acceptable roadmap for the generation of the above items within
an acceptable timeline with the end-in-view of more granular data that reflect
the diversity of the population and its needs.
4. Engage stakeholders to share and address data requirements while enhancing
the financial inclusion database.
5. Encourage the conduct of research and case studies to better appreciate
existing data and progress. Such research can also build on relevant and
existing literature and studies.
6. Review continuously the data and measurement framework, including all
covered indicators, to ensure integrity, relevance, and policy cohesion and
effectiveness.
7. Make available relevant data to stakeholders to institutionalize accountability,
monitoring, and evaluation.
NSFI M&E Framework
The development of a monitoring and evaluation (M&E) framework is thus crucial

in measuring the effectivity of each initiative and output towards a more inclusive financial
system. M&E Framework enables us to translate data to a story on how programs
contribute to the NSFI objective.
Activity programs and initiatives
actions under direct control of

Outputs stakeholders
Outcomes results of the inputs
impact of the outcomes of

Impact each program to the national
development and growth

National Strategy For Financial Inclusion: Background

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National Strategy for Financial Inclusion

Align various financial inclusion related policies and programs

Chair and Secretariat Bangko Sentral ng Pilipinas

Commission on Filipinos Overseas

Financial inclusion or an inclusive financial system is defined as a state

Considering the importance and the multi-dimensional nature of financial inclusion, a

National Strategy for Financial Inclusion is a comprehensive public document developed

1. Institutionalize measurement and reporting of financial inclusion indicators

NSFI M&E Framework

The development of a monitoring and evaluation (M&E) framework is thus crucial

actions under direct control of

Outcomes results of the inputs

impact of the outcomes of

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