fbpx 49386-001: Financial Inclusion Framework Strengthening | Asian Development Bank

Philippines: Financial Inclusion Framework Strengthening

Sovereign (Public) Project | 49386-001 Status: Active
 
Project Name Financial Inclusion Framework Strengthening
Project Number 49386-001
Country Philippines
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9166-PHI: Financial Inclusion Framework Strengthening
Technical Assistance Special Fund US$ 600,000.00
TA 9166-PHI: Financial Inclusion Framework Strengthening (Supplementary)
Technical Assistance Special Fund US$ 350,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Finance / Finance sector development - Housing finance - Inclusive finance - Insurance and contractual savings - Small and medium enterprise finance and leasing

Gender Equity and Mainstreaming No gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy
Impact The TA is aligned with the National Strategy for Financial Inclusion and the Philippine Development Plan 2011-16 aiming for higher inclusive growth and income equality through greater financial inclusion.
Project Outcome
Description of Outcome Institutional capacity of national financial inclusion initiatives strengthened
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Financial inclusion framework assessed to formulate effective assistance

2. Policy and regulatory framework improved to promote savings and credit

3. Microinsurance regulatory framework improved to develop diverse microinsurance products and services

4. Regulatory and supervisory capacity enhanced to promote digital finance

Status of Implementation Progress (Outputs, Activities, and Issues) Summary of Activities: Since the start of this TA which supports the Inclusive Finance Development Program, a number of key accomplishments have been achieved. Under output 1, based on an assessment of the Philippines financial inclusion framework to formulate effective assistance the following activities were supported: (i) a summary sector assessment on financial inclusion, (ii) a focused assessment of national ID system and financial inclusion, and (iii) a gender gap analysis on financial inclusion. Under output 2, the policy and regulatory framework improved to promote savings and credit, performance standards (financial, social and governance) for MNGOs (microfinance NGOs) was developed, and a memo circular was issued on rules and regulations for MNGOs. A supervision manual for MNGOs was provided along with training to the governing committee of the Microfinance Regulatory Council (MNRC), chaired by the Securities and Exchange Commission. A stock-taking assessment of financial literacy programs was completed as well as a study on agriculture value chain financing. ADB provided financial and technical support for the first Financial Literacy Stakeholders Exposition sponsored by the BSP and helped develop a monitoring and evaluation framework for key financial literacy partnerships supported by the BSP, including with the Department of Education financial literacy program which will impact more than 800,000 teachers and 23 million learners. Following an assessment of agriculture finance in the Philippines, an agriculture value chain finance pilot was launched. Under output 3, the microinsurance regulatory framework was improved to promote diverse microinsurance products and services. A pilot on public-private partnership (PPP) on agriculture insurance was developed in collaboration with the Insurance Commission, the Philippines Crop Insurance Corporation and private sector insurance companies. The pilot is progressing through design and product development will also support the Insurance Commission in adopting a regulatory sandbox approach. Under output 4 and 5, the ADB supported the BSP's regulatory sandbox for digitizing financial services starting with the conduct of a baseline assessment of financial access of Cantilan Bank was conducted prior to migrating its hardware-based core banking system to the cloud. Following the successful migration of the bank's core banking system to the cloud, an assessment of rural banks was completed in September 2019 in preparation for the design of the Fintech for Inclusion Transformation (FIT) Program, aimed at supporting other rural banks in their digital transformation.Specific Activities include:" Conference on Financing Agriculture Value Chain in the Philippines co-organized by the Bangko Sentral ng Pilipinas (BSP) and the Asian Development Bank (ADB) held from 10-11 May 2017 with over 100 participants including: (i) policy makers and regulators responsible for financial inclusion, MSME access to finance, and agri-value-chain development; (ii) financial institutions responsible for financing MSMEs and agri-businesses; (iii) agriculture value chain practitioners; (iv) Associations and networks of MSMEs and agri-businesses; (v) experts and researchers in the field of MSME/agri-value chain development; (vi) development partners; (vii) ADB staff responsible for financial inclusion, MSME projects, and rural/agri-business development Designed to facilitate interactive discussions among all participants to identify constraints, challenges, and policy actions to promote, the conference comprised six key sessions addressing: 1. good practices of sustainable agriculture value chains; 2. developing a value chain ecosystem for agriculture; 3. designing financing approaches and products for the value chains; 4.vinnovative digital solutions for agriculture value chain financing; 5. enabling policies, regulatory framework, and financial infrastructure to support the value chain financing; and 6. exploring live financing opportunities in the value chains. A National Agriculture Finance Specialist engaged and a second agriculture value chain finance workshop was held 24 September 2019 to launch the agriculture value chain finance pilot project to support the convergence and coordination of development assistance to various actors in the agriculture value chain. Technical assistance will be provided to participating pilot banks in any or all of the following areas: product development; required structural and organizational changes; policies, processes and procedures to be adopted; value chain analysis; development of market for AVCF. The project shall serve as a learning platform for banks that plan to engage in AVCF, as well as for the BSP and other government agencies involved in developing and supporting agriculture value chains. Based on the experiences of the participating banks, a case study and a toolkit on AVCF financing for banks shall be developed. When needed, the experiences and lessons learned from the implementation of the pilot financing ecosystem shall also inform the development and formulation of relevant policy or regulatory measures and other government interventions supportive of AVCF. " International Inclusive Finance Specialist engaged. Accomplishments to date include: - Provision of technical Assistance to the Microfinance NGO Regulatory Council (MNRC). - Formulation of the Accreditation Criteria for MF-NGOs. The following activities were conducted:- Formulation of the Performance Standards for MF-NGOs with particular focus on Financial and Social Performance Standards- Presentation of the draft performance standards during the 4 regional consultation workshops conducted. The consultation workshops were attended by MF-NGOs in the regions. - Based on the results of the regional consultations, the Memorandum Circular on the Accreditation of MF-NGOs was drafted and eventually finalized and issued on February 20, 2017- Formulation of the Standard Chart of Accounts (SCA) for MF-NGOs. To ensure uniformity and consistency of reporting of MF-NGOs, the SCA for MF-NGOs is currently being formulated. In relation to this, the following activities were conducted:- In coordination with the MNRC secretariat, convened the technical working group (TWG) on the formulation of the SCA. The TWG is comprised of accountants and finance officers of 10 MF-NGOS. - Conduct of 3 TWGs to formulate the draft SCA. The draft SCA was presented to the Chairperson of the Association of Certified Public Accountants in Public Practice (ACPAP). The draft is currently being revised in coordination with the Office of the General Accountant of the SEC to consider the comments raised by ACPAP. A training workshop for MNRC supervisors was provided to build capacity of staff to conduct onsite and offsite supervision. A National Agriculture Finance Specialist engaged to conduct a study to generate ideas and recommendations on future policy action and private sector action plan to support financing for the agriculture value chain in the Philippines. National Digital Finance Specialist (Monitoring and Evaluation) engaged to support development of a baseline evaluation for pilot project with a rural bank to migrate core banking system to cloud based system. " A National Project Management Specialist engaged to help support implementation of TA activities." As of 30 September 2020: To date, the following consultants have been engaged under the TA: (i) an international inclusive finance specialist/team leader providing support to the Securities Exchange Commission in its role as chair and secretariat of the Microfinance NGO Regulatory Council; (ii) a national agriculture finance specialist conducting an assessment of agriculture finance following a joint ADB/BSP workshop on agriculture value chain finance; (iii) an international digital monitoring and evaluation specialist developing a monitoring and evaluation framework for the digital finance pilot with Cantilan Bank in Mindanao being supported jointly with SDCC; (iv) a national gender expert conducting a gender gap assessment to develop a set of recommendations for SP2; (v) a national financial literacy expert conducting an assessment of nationwide financial literacy initiatives; (vi) a team of international experts conducting an analysis on the implementation of the digital national identification scheme and how it can be used to increase access to finance; (vii) an international real time and gross settlement systems (RTGS) expert to conduct a review and analysis of the TOR for the new RTGS solution that the EA will acquire; (ix) international agriculture insurance specialist to support development of a PPP for agriculture insurance; and (x) a national project manager providing administrative support to the consultants. " Output 1: Financial Inclusion framework assessed to formulate effective assistance. Completed Activities: - Drafting of the summary sector assessment on financial inclusion Completed Activities: - Study on the national ID system and financial inclusion- Comprehensive assessment of the state of financial inclusion in the Philippines- Gender gap analysis on financial inclusion " Output 2: Policy and regulatory framework improved to promote savings and credit. Completed Activities: - Performance standards (financial, social and governance) for MF-NGOs developed and memo circular issued.- Rules and regulations for MF-NGOs issued; Formulation of the supervision manual for MF-NGOs; Stock-taking of financial literacy programs currently implemented.- Study and development of a roadmap on agriculture value chain financing.-; Training of supervisors on supervision of MF-NGOs. Output 3: Microinsurance regulatory framework improved to promote diverse microinsurance products and services. Completed Activities:- Roundtable discussion on public-private partnership on agriculture insurance.- Creation of the TWG on the development of a PPP business model for agriculture Insurance established. On-going Activities: Continued support to the Microfinance Regulatory Council (MNRC) for its supervisory role. Engagement of a firm to support the financial consumer protection and the Truth in Lending Act with the development of a video aimed at educating MNGO staff and their clients. The agri-insurance pilot is progressing through design and product development will also support the Insurance Commission in adopting a regulatory sandbox approach. " Output 4: Regulatory and supervisory capacity enhanced to promote digital finance. Completed Activities:- Baseline assessment of financial access of Cantilan Bank prior to migration to cloud-based core banking technology. On-going Activities:- Study to measure the impact on financial access of Cantilan Bank's migration to cloud-based core banking technology. On-going Activities: Following the successful migration of the bank's core banking system to the cloud, an assessment of rural banks was completed in September 2019 in preparation for the design of the Fintech for Inclusion Transformation (FIT) Program, aimed at supporting other rural banks in their digital transformation." As of 28 March 2019- TA amount increased by $350,000 from original TA amount of $600,000 for a cumulative TA amount of $950,000 in Nov 2018.- TA completion date extended from 31 Oct 2018 to 31 Oct 2021.
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation Financial Education Stakeholders Expo held in Nov 2018.
Business Opportunities
Consulting Services

A. International Consultants

1. Inclusive Digital National Identification for Financial Inclusion (consulting firm)

2. Digital Finance

3. Inclusive Finance

4. Real-Time Gross Settlement

B. National Consultants

1. Gender Gap

2. Agriculture Finance

3. Project Management

4. Financial Literacy

As of 27 March 2020

The following consultants are working for the overall Inclusive Financial Sector Development Program 2 and supporting its reforms:

1. International Inclusive Finance Specialist/Team Leader

2. National Agriculture Finance Specialist

3. International Agriculture Insurance Specialist

4. International ID for Financial Inclusion expert

5. International Financial Technology Funds Manager

6. National Communications expert

Responsible ADB Officer Hattel, Kelly L.
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
Bangko Sentral ng Pilipinas
Rm. 301, 3rd Floor, 5-Storey Bldg.
A. Mabini cor. Vito Cruz Extension
Malate, Manila, Philippines
Timetable
Concept Clearance 08 Jun 2016
Fact Finding -
MRM -
Approval 31 Aug 2016
Last Review Mission -
Last PDS Update 30 Sep 2020

TA 9166-PHI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Aug 2016 20 Jan 2017 20 Jan 2017 31 Oct 2018 31 Oct 2021 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
950,000.00 0.00 0.00 0.00 0.00 0.00 950,000.00 31 Aug 2016 755,551.52

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

Title Document Type Document Date
Cloud-based Core Banking in the Philippines Brochures and Flyers Apr 2019

The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Financial Inclusion Framework Strengthening: National Agriculture Finance Specialist Individual - Consulting Closed 24 May 2019 28 Jun 2019
International Agriculture Insurance Specialist Individual - Consulting Closed 10 Apr 2019 16 Apr 2019
Financial Inclusion Framework Strengthening - National Financial Technology Fund Advisor Individual - Consulting Closed 06 Apr 2019 12 Apr 2019
Inclusive Finance Specialist/Team Leader Individual - Consulting Closed 07 Mar 2019 13 Mar 2019
Digital National Identification for Financial Inclusion Firm - Consulting Closed 18 Dec 2017 31 Dec 2017
National Identification for Financial Inclusion Expert Individual - Consulting Closed 28 Nov 2017 01 Dec 2017
International Digital Finance Specialist Individual - Consulting Closed 21 Sep 2017 28 Sep 2017
National Microinsurance Specialist Individual - Consulting Closed 09 Aug 2017 22 Aug 2017
International Digital Finance Specialist (Monitoring and Evaluation) Individual - Consulting Closed 04 Aug 2017 10 Aug 2017
National Agriculture Finance Specialist Individual - Consulting Closed 28 Jul 2017 06 Aug 2017
National Project Management specialist Individual - Consulting Closed 22 Jul 2017 04 Aug 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Capacity Development Technical Assistance 9166 15 May 2018 BFA(UNITED STATES) 259 Elm Street,Suite 200, Somerville, MA A Boston United States of America Bangko Sentral ng Pilipinas Consulting Services 133,974.00

Procurement Plan

None currently available.