Microfinance and the BSP
By Ignacio R. Bunye
Sunday, October 13, 2013
IN LAST week's column, we mentioned how the Bangko Sentral ng Pilipinas
(BSP) helps in attaining a better life for all Filipinos through its
advocacy of financial inclusion.
BSP carries out this advocacy through financial literacy and education
as well as by making possible, through enabling regulations, the
delivery of microfinance products and services to the underprivileged
and unbanked in our society.
Microfinance products include micro-deposits (which require minimal
maintaining balance), micro-insurance, micro-enterprise loan plus,
housing microfinance loans, and micro-agri loans.
These products are well within the means of low-income households. They
are also relatively easier to access because of simpler documentation.
In a report entitled Financial Inclusion in the Philippines, the BSP
reported the dramatic growth of micro-finance in the country in terms of
the number of participating institutions, number of clients, loans
outstanding and savings generated.
"As of end-year 2012, there are 187 banks with microfinance operations
reaching more than 1 million clients with loans outstanding amounting to
P8.4 billion and savings of P6.4 billion," the BSP said.
Alongside these statistics are inspiring stories of countless
micro-entrepreneurs who have graduated from a hand-to-mouth existence to
earning not only a steady income for their families but also generating
employment for the rest of the community.
According to the same report, enterprises funded through microfinance
already make up 91.6% of industries in the nation, while 30% of the
workforce is employed in microenterprises.
The BSP's microfinance advocacy actually began 13 years ago, when the
General Banking Law of 2000 tasked the country's central monetary
authority to set regulations for microfinance in the banking sector.
To date, the BSP has already released 26 Circulars on microfinance that
include guidelines and regulations on loans, products, and governance.
The result of all these years of building a sound regulatory framework
for microfinance has caught international attention. For the 5th year in
a row, the Philippines has been adjudged by the respected Economist
Intelligence Unit as the best in the world in microfinance policy-making
and implementation.
For this a lot of credit goes to a small group within the BSP called the
Inclusive Finance Advocacy Staff (IFAS), headed by Pia Roman Tayag.
Formerly called the Microfinance Unit, the group was established in 2002
to become the main driver of the BSP's microfinance initiatives.
The team follows a multi-layered approach in promoting microfinance. The
team works with other departments in the BSP in crafting policies that
will benefit the "unbanked." The team also frequently goes to the field
to touch base with stakeholders, to promote capacity-building and
advocacy activities in order to ensure the sustainability and
effectiveness of microfinance products and services being offered.
Tayag, (and the other members of her team Rochelle Tomas, Mynard Bryan
Mojica and Mary Rose Roque) attribute their success to high level support.
"The supportive and visionary leadership of Deputy Governor Nestor G.
Espenilla and Governor Amado M. Tetango Jr. empower us to find ways to
do our work better," she shared.
Tomas is further encouraged seeing firsthand the impact of their work on
ordinary people's lives.
For their remarkable work, the four members of IFAS will be recognized
by the Civil Service Commission on October 24 as winners in this year's
Search for Outstanding Public Officials and Employees.
They will receive the Presidential Lingkod Bayan Award, which is given
to an individual or group for exceptional or extraordinary contributions
that have nationwide impact.
Note: My book "Central Banking for Every Juan and Maria" is now
available in major branches of Fully Booked, Power Books, National
Bookstore and UP University Press.
