Earlier this month, we’ve talked about how PHILSYS set an unprecedented landmark for inclusion in terms of legal identities and societal recognition for Filipinos, who were once underserved. By underserved, we mean people who are living under generations of poverty, the Indigenous People living in distant communities and the people who grew up without birth certificates.
With PHILSYS ramping up its activities this year to register over 70 million Filipinos to the national ID by end of 2021, acceleration of inclusion is the turnkey in not only providing economic and financial inclusion, but it can also revitalize and reinforce the economic growth of the country under a long term vision as the country is still in the period of recovery from the global pandemic.
Economic and Financial Inclusion
The Philippine national ID otherwise known as PHILSYS has a unifying rally cry for it. It carries the support of the national government, the local governments, the private business sector and the financial sector. The Bangko Sentral ng Pilipinas (BSP) lauded the government’s efforts in fast-tracking the implementation of PHILSYS, citing it as a game changer for the Philippine finance and trade industry in regards with the following:
- Financial inclusion for the unbanked
- A vital piece of the BSP’s digital payments roadmap of 2020-2023
- PHILSYS ID is mandated to be recognizable for banking KYC and account openings
- Improve the goal metric of 70% adult Filipinos be enrolled to bank accounts
The state-run Land Bank, have recently announced a partnership with the Philippine Statistics Authority (PSA) and PHILSYS in order to further the goal of financial inclusion in the Philippines. This comes after the publication by the PSA that state that 82% of the 10.5 million initial registrants of the PHILSYS ID do not have bank accounts. As partners and as an initiative for PHILSYS ID holders, the LandBank stated that enrolees under the PHILSYS stage 2 registration this year will be eligible to acquire their LandBank Mastercard Prepaid Card where holders will be able to deposit, withdraw, transfer, receive money and be able to use this card for online and cross-platform payments.
LandBank have also partnered with cooperatives, associations, SMEs and private bodies as banking partners to expand and facilitate its onboarding – Know Your Customer (KYC) processes at PHILSYS designated registration areas.
PHILSYS Greater Precedent on Economics
By providing banking access to ones who were previously unbanked, by providing financial literacy and supporting the country’s digital payment initiatives, PHILSYS has a greater impact to the Philippine local economy and can bolster domestic finance performance within the ASEAN region. As PHILSYS card holders that number in the millions in the near future — are able to entrust their money with state owned banks such as LandBank or any of the established private banks, it will boost the overall health and reserves of the Philippine-based banks. To the eyes of the continental and global banks, this is a strong indicator of a healthy fiscal situation for the local financial bodies. With greater bank reserves, local banks can help buoy domestic and private loans to the government and its project to further expand the country’s structure in terms of commerce with public infrastructure. In tapping even the most minimal maintaining amount from the millions who were once unbanked, banks are in a position to not only reinforce their reserves, but also be in a driver seat to offer greater incentives across would-be bank account holders. With access to a bank account and a bank card, the newly banked will have the capability to participate in transactions across the digital and local commerce. A boost on domestic spending will not only reinvigorate the economy, but also have the potential to increase the nation’s GDP.
But most of all, having a bank account recognized through PHILSYS will also help the government in its efforts to provide micro-finance loans for livelihood and regional startups.
As 2021 is a period seen as a recovery stage from the pandemic, forces like the PHILSYS are looking to expand the country’s economic and financial inclusiveness that will benefit the country for long-term.
This article is first published on BitPinas: PHILSYS: Accelerating Economic and Financial Inclusion