Content area
Full Text
ABSTRACT
This paper examines financial inclusion in the Philippines. It initially benchmarks financial inclusion in the country against other developing Asian economies using the latest supply-side and demand-side data. It then estimates a set of probit regressions using Philippine microdata from the World Bank's 2021 Global Findex Database. The latter exercise captures domestic stylized facts and provides a comparative analysis versus regional peers. The review of relevant indicators shows the Philippines leading the region in terms of creating an enabling environment but reveals a mixed performance on the supply-side (financial outreach and uptake) and lagged outcomes on the demand-side (account ownership and use). Probit regressions confirm findings of previous studies, showing mainly positive associations between financial inclusion indicators and individual characteristics, such as education, income, and employment, and a nonlinear relationship with age. However, it also presents new results, including a smaller gender gap in the ownership and use of formal accounts and emergent disparities across education and income in the ownership and use of financial technology, particularly mobile money. Among different groups in the Philippines, individuals from lower-income households are more likely to be involuntarily excluded from the barriers include high cost, distance, and a lack of trust in financial institutions. Adults in the country are more likely than their counterparts in the Association of Southeast Asian Nations to be hindered by perceived high costs, lack of trust in financial institutions, and religious reasons.
(ProQuest: ... denotes formulae omitted.)
INTRODUCTION
Financial inclusion can reduce poverty and inequality by helping individuals invest for the future, smooth consumption, and manage financial risk (Demirgüç-Kunt et al. 2017). At the macro level, it can facilitate investments in education and businesses and enhance productivity and long-term economic growth. Recent empirical research (Gutierrez-Romero and Ahamed 2021) suggests that financial inclusion can help curb an expected rise in poverty by mitigating the detrimental effects of inequality on poverty.
In the Philippines, significant efforts have been dedicated to promoting greater participation in the financial sector, such as enhancing accessibility to financial products and services (BSP 2020). Despite financial inclusion being prominent on the policy agenda since the early 2000s, efforts to expand financial outreach and usage have remained limited in subsequent years. Studies focusing on the country were motivated by the...