Digital banks in the Philippines are making significant strides in promoting financial inclusion, enhancing access to banking services for both the underserved and traditionally banked populations, according to Manu Pandu, Chief Operating Officer of Maya.
With six digital banks licensed in recent years, nearly 45% of newly opened accounts in the past year originated from these digital platforms. Pandu emphasized that banks like Maya have simplified access to credit, offering a 'delightful alternative' for those previously limited by traditional banking methods. Many Filipinos are now experiencing greater convenience and simplicity through these digital banking solutions.
The digital banking sector is poised for growth, bolstered by factors such as a large population, economic stability, and a regulatory environment that encourages innovation. 'Post-pandemic, it has generated a lot of interest,' noted Pandu, highlighting the Philippines' consistent GDP growth rate of 5-6% as ASEAN's second-largest economy.
Regulators have recently lifted the moratorium on new digital banks, paving the way for four new entrants next year. This decision reflects the increasing demand for digital banking in a market that remains largely underserved, particularly among the micro, small, and medium enterprise (MSME) sector, which currently receives only 6% of bank credit.
Despite challenges such as inconsistent internet access and a developing national ID system, the Philippines has made notable progress in financial inclusion, with the rate rising to 65%. Digital payments now account for over 53% of retail transactions, marking a significant shift in the country's financial landscape.