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Leveraging Digital Financial Services for Financial Inclusion in the Philippines: An Initial Assessment

Countries, including the Philippines, are considering ways of leveraging the widespread use of mobile phones and rapid digital innovations to promote financial inclusion. With the potential to reach a greater number of individuals and households, digital financial services (DFS) could help address a significant portion of the unmet demand for payments services and credit needs of the unbanked and underserved segments of society. The ease of access and affordability that DFS provide have allowed millions of poor individuals and households to move from purely cash-based transactions to formal financial services. These developments have, in turn, led to improved household welfare and contributed to overall economic growth. This study explores the potential of DFS in promoting financial inclusion in the Philippines. It contributes to the existing literature by providing an empirical assessment of Filipino households’ use of DFS and the factors that affect it and examining the impact of the use of DFS on Filipino household welfare. Our results indicate that the use of DFS by Filipino households are significantly affected by factors that include educational level, ownership of deposit account, and access to the internet. Moreover, the use of DFS can contribute to the improvement of household welfare.


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