Financial Inclusion, Stability, Integrity, and Protection: Philippines
Under the right circumstances, financial inclusion, stability, integrity, and consumer protection (collectively referred to as I-SIP) can be positively related, and the failure to consider any one of these objectives can lead to problems. Since 2012, CGAP has been exploring the relationships, or linkages, among these key objectives of financial policymaking. We have analyzed several policy interventions (laws and regulations) in South Africa, Pakistan, Russia, and the Philippines to better understand how the four objectives are related and how policymakers have been balancing them. Based on this research, CGAP developed an approach to designing or adjusting financial-sector policies that involve identifying, managing, and optimizing the linkages among the I-SIP objectives triggered by a given policy intervention: the I-SIP Approach.
The Philippines I-SIP research reaffirmed the usefulness of following a systematic approach. Where a systematic approach was followed, whether intentionally or not, more positive effects on all four I-SIP objectives could be observed. When I-SIP propositions had not been considered, it was more difficult for policymakers to use a proportionate approach to regulate and supervise financial-sector actors.
The case of the Philippines is unique in that the country already has an established, structured consultative process and associated multi-stakeholder coordination and implementation bodies that develop national strategies for microfinance, microinsurance, and financial inclusion. This provides a strong foundation for integrating the I-SIP Approach into regular policymaking in the country.
The analysis and findings presented in this report should be useful to national policymakers as they work to advance financial inclusion in their countries and face challenges of balancing this objective with the objectives of stability, integrity, and consumer protection.