Philippines to offer microfinance record

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Posted on November 09, 2011 12:24:47 AM

OFFICIALS will present the Philippines’ microfinance experience during this week’s Asia-Pacific Economic Cooperation (APEC) meetings in preparation for the creation of a financial inclusion strategy to be adopted by the body’s member economies.

“The Philippines is taking an active role in the APEC Economic Leaders’ Meeting. We have been asked to present the developments in our microfinance initiatives because we are very much advanced compared to other countries,” Finance Undersecretary Rosalia V. de Leon yesterday said in a telephone interview.

The presentation will illustrate the country’s microfinance policies and regulatory regime. These will also be used as a reference as the APEC drafts its National Strategy for Financial Inclusion for its 21 member economies.

“Financial inclusion is actually an initiative of the United States in APEC, but it saw that the Philippines is advanced in that perspective,” Ms. de Leon said.

The APEC Financial Inclusion Initiative aims to encourage countries to increase the poor’s access to affordable financial services, such as savings, payment, credit and insurance.

The Philippines devised a National Strategy for Microfinance as early as 1998 to institutionalize the provision of small loans to the poor to jumpstart entrepreneurial projects.

This paved the way for the establishment of wholesale microfinance initiatives, providing funding for institutions such as rural banks, nongovernment organizations and cooperatives.
The private sector, for its part, is responsible for retail microfinance or extending credit directly to borrowers from the lower-income sector to help alleviate poverty.

The government released a total of P168.693 billion in microfinance loans from 2001 to 2009 to nearly 7.14 million borrowers. A separate P82.53 billion was also extended from 2004 to 2009 to create 2.83 million jobs.

The Philippine Development Plan 2011-2016, the economic blueprint of the country under the Aquino administration, identifies microfinance as one of the strategies to build a resilient and inclusive financial sector.

Among the priorities are microinsurance, which provides affordable risk protection against financial distress caused by accidents, death and natural catastrophes. The plan also champions the Credit Surety Fund, a facility from which cooperatives can source funding for micro, small and medium enterprises.

The APEC’s annual meeting is being held this year in Honolulu, Hawaii. Preliminary discussions are already being staged and the event will culminate in a leaders’ summit on Sunday.
APEC has 21 member economies which account for about 40% of the worldís population, approximately 54% of world gross domestic product and about 44% of world trade.