Local government units (LGUs) are now onboard as the Bangko Sentral ng Pilipinas (BSP) continues to ramp up its digitalization and financial inclusion effort.
BSP Governor Benjamin Diokno said the adoption of digital disbursement would help build an inclusive financial system, especially amid the pandemic.
“Financial inclusion enables unbanked Filipinos to access affordable financial products and services, such as opening transaction accounts, obtaining loans, and investing in and purchasing products safely and conveniently,” Diokno said.
Under the Digital Payments Transformation Roadmap, the BSP has committed to convert at least half of the total retail payments into electronic channels and to onboard at least 70 percent of Filipino adults into the formal financial system through the ownership and use of a transaction account by 2023.
Latest estimates showed that the share of digital payments to total retail transactions in terms of volume increased to 30 percent in 2021 from 20.1 percent in 2020, while the number of Filipino adults with bank accounts increased to 53 percent as of the first quarter of 2021 from 29 percent in 2019.
“Financial inclusion therefore empowers Filipinos to improve their welfare and overall quality of life,” Diokno said.
The Department of the Interior and Local Government (DILG) earlier issued an advisory urging LGUs to settle their payables for a more efficient government transactions and delivery of social services to the public.
DILG Secretary Eduardo Año issued an advisory last Jan. 26 calling on DILG regional offices and LGUs to promote a digital disbursement system.
The advisory urged LGUs to utilize digital disbursement in the distribution of local and national cash assistance programs to their beneficiaries’ transaction accounts and help constituents with no existing transaction accounts to avail of the opening of accounts with the state-run Land Bank of the Philippines in more than 300 Philippine Identification System (PhilSys) registration centers free-of-charge.
For unbanked constituents with smartphones, the DILG said they can maximize the account using the Landbank- Pay mobile wallet.
The LGUs were also enjoined to join PhilSys in promoting digital payments for an efficient and safer transfer of government aid to their constituents as well as to coordinate with Landbank for the digital disbursement of cash assistance through the transaction accounts opened by the bank for qualified constituents.
Image Sources: BSP