The Market Monitor Minding the Nation's Business
By Rose de la Cruz
Royalties are only fed information by those around them. But not Queen Maxima of the Netherlands, who is conducting field visits and meeting with top economic officials and the President to work for wider financial inclusion and better financial health of all people.
The Queen, as United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA), was able to grasp reality in the Philippines during such visits in Manila and surrounding communities.
She voiced that the high prices of commodities, particularly food, have prevented Filipinos from saving. Their current income is barely enough to meet daily family needs.
She brought her top embassy and UN officials in her visits, along with economic leaders of the Philippines.
In the meeting with President Marcos and the economic team at Malacanang on May 22, the Queen, vowed to support inclusive finance and financial health efforts of the Philippines, particularly focusing on connectivity, cybersecurity, digitalization and interoperable payments crucial for underserved groups like farmers and MSMEs. Her first visit in the Philippines was in 2015 for the launch of the National Strategy for Financial Inclusion.
The Queen noted that high commodity prices has made it almost impossible for Filipinos to save and that a stable macroeconomic environment is needed for financial inclusion and financial health to thrive in the country.
At a press briefing she defined financial health as the state of one’s ability to manage day-to-day expenses, to have a long-term financial vision, to cope with financial shocks, and to balance all these in the short term.
“You have very high inflation. Saving in your own currency would not be very sustainable,” said the Queen.
Queen Maxima stressed that the Bangko Sentral ng Pilipinas (BSP) and the Monetary Board have to stabilize the macroeconomic situation, such as global inflation, higher monetary policy, and higher borrowing costs, for more Filipinos to have access to financial services, reported Business Mirror.
Headline inflation accelerated to 3.8 percent in April for the third consecutive month due to a “surge” in food inflation, which rose to 6.3 percent from the previous month’s 5.7 percent.
Meanwhile, the Monetary Board maintained the BSP’s Target Reverse Repurchase (RRP) rate at 6.5 percent. This is the fifth consecutive meeting that the Monetary Board decided to maintain the RRP.
“Definitely, there [are] incentives and business incentives to save, to borrow, but I would say that in general, we still need a stable economic environment,” Queen Máxima said.
BSP Governor Eli M. Remolona said that the concept of open finance will provide various financial solutions to foster financial inclusion.
“What we’re trying to do now is encourage open finance by designing our own platforms, our own APIs (artificial programming interface), and they will all be about financial health. So we’re starting with Pera for example,” Remolona said.
The Personal Equity and Retirement Account (PERA), is a voluntary retirement saving program that supplements the existing retirement benefits from the Social Security System (SSS), Government Service Insurance System (GSIS) and employers.
Remolona said that the BSP tapped the banks in the country to connect their pension schemes to Pera through the creation of an API.
“They will connect to Pera so that account holders in the bank can get their pensions through Pera,” Remolona added.
Remolona underscored the importance of pensions as Filipinos don’t save enough. “Our pensions are our children. We expect them to take care of us in our old age,” he added.
The BSP is also looking into APIs for insurance, such as life insurance, property insurance, and accident insurance.
“I think when we have the open finance for insurance, that will bring prices down. We have work to do, so it’s not easy to do it. We got a lot of advice and access to expertise all over the world, and so I think we can do it,” he said.
Aside from the BSP governor, the Queen held field visits in Manila and surrounding provinces and engaged in high-level meetings with the President, Finance Secretary Ralph G. Recto and BSP Governor Remolona during her visit to the Philippines from May 21 to 23, 2024.