GOVERNMENT efforts to promote financial literacy in the Philippines will bear fruit in improved economic stability and greater protection for consumers against fraud, the Department of Finance (DOF) told a recent forum in Chicago.
Finance Undersecretary Gil Beltran told attendees at the 10th Financial Literacy Summit hosted by Visa Inc. and the Federal Reserve Bank of Chicago that government support for microfinance and microinsurance, financial literacy education, and new technology to expand access to financial services is already paying dividends in greater financial stability.
Financial stability, in turn, fuels economic growth, which is why financial literacy is the most important component of the Philippines financial inclusion policy, Beltran said.
To date, he said the Microfinance Program of the government has generated about 10 million microborrowers, with microinsurance products covering 37.6 million lives or 37 percent of the total population.
“We have financial education in the schools, lectures for overseas Filipino workers who, as a group, remit $28 billion annually, and lectures on financial market for young people who make up 1.3 million employees of the BPO [business process outsourcing] sector and who, as a group, generate about $25 million in revenues annually,” he noted.
Indeed, the DOF official said the financial literacy program should cover everyone from ages 5 to 100.
Beltran also highlighted the role of technology in spreading access to financial services, noting that mobile phones, ATM cards, and computer gadgets can now enable transactions across great distances at low cost.
Websites now educate the public on the budgets and actual expenditures of government institutions, provide credit information on micro- and small-scale enterprises to prospective lenders–through the Credit Information Corp.– and prioritize the liens on real estate and movable collaterals used to secure loans through the Land Registration Authority’s collateral registry, he said.
Nevertheless, the DOF official pointed out that financial literacy should include a listing of financial products available in the market such as stocks, bonds, insurance and mutual funds because these should compete on equal footing with consumer products for the investor’s money.
“If the financial literacy program succeeds, financial stability is enhanced because stakeholders make rational decisions and manage their funds and businesses well.
They are also protected from fraudulent transactions and dubious deals,” he said.
Regulators, with the assistance of local governments, can check on the activities of regulated entities, Beltran said.
“Clients who are well informed of their rights can access the alternative dispute mechanisms offered by regulators to settle complaints,” he said.