Investments vital for financial inclusion

Developing the country’s investment market in promoting financial inclusion is important because of the great business opportunities it could bring, according to the Bangko Sentral ng Pilipinas (BSP).

During the PRU Life UK Investment webinar on Friday, Bangko Sentral Governor Benjamin Diokno told participants that “investments are especially critical to realizing financial inclusion, as these lead to greater market participation and enterprise opportunities.”


He said that while the early groundwork for an inclusive financial system had borne fruit, much still needs to be done to get more Filipinos into investing, noting that 75 percent, or 54 million, of them do not have investments.

“While this figure may be disappointingly low, it shows…immense room for growth in the investment market. The key is to fortify the foundations that will facilitate entry into the formal financial system,” he added.

According to him, the Bangko Sentral has taken the necessary steps to ensure that it would be easier for Filipinos, especially the unbanked and underserved ones, to be financially included by leveraging on technology.

These include the democratization of account ownership, expansion of networks of low-cost touchpoints and an efficient retail payment system.

“With policies, regulations and digital infrastructures in place, a wider range of financial products and services can be made more accessible to a greater number of Filipinos,” Diokno said.

He also said that besides deposit accounts, loans and payment services, affordable retail investment products should be part of Filipinos’ arsenal of financial tools.

“Many Filipinos perceive investing to be costly, and have yet to realize its value as an additional income source,” the BSP chief added, underscoring that investments remained low by growing from 23 percent in 2017 to only 25 percent in 2019.

To put investments within reach of ordinary Filipinos, Diokno said the central bank had allowed trust corporations to distribute their unit investment trust funds through third parties, specifically individual and institutional agents.

It also launched the digital Personal Equity Retirement Account (PERA), which allows investors to open, access, and invest in a range of funds through their PERA account anytime, anywhere, through their mobile devices.

“Creating a community of investors require industry players to adopt a financial inclusion mindset. And I urge you to take this to heart,” the central bank head said.

Thus, growing the market for investments to support financial inclusion requires a concerted effort among stakeholders, he added.

“Through our recent initiatives, we aim to encourage more Filipinos to try available investment products that can benefit and help them build a solid financial future.”

This article was originally published by Manila Times


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