Around 1.7 billion people globally are still unbanked – either having no proper savings or access to credit – according to the 2017 Global Findex Database. In Southeast Asia, only 27 per cent of adults have formal bank accounts and only 33 per cent of businesses have access to proper financing. While the region has been growing exponentially for the past few decades, financial inclusion in the region remains poor.
The Philippine economy in particular has been consistently growing by 5.3 per cent per year, driven by favourable economic conditions and strong macroeconomic fundamentals. However, this promising growth can only be achieved sustainably and inclusively if roadblocks currently faced by the lifeblood of the country’s economy – its small and medium-sized enterprises (SMEs) – are addressed.
Although SMEs comprise 99.6 per cent of all businesses in the Philippines and employ 65 per cent of the workforce, they only account for 35 per cent of the country’s GDP. Clearly, there is much room for development in this sector that could unlock opportunities for greater employment, rising incomes, innovation and value creation.