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Finding financial freedom

On June 12 each year, the Philippine Flag is seen waving all over the nation in celebration of our freedom. While we can claim to be free from the shackles of colonialism, many Filipinos find themselves held down by the tyranny of financial hardship.

The roles of the public and private sectors remain crucial to help our countrymen recover and achieve financial freedom during these extra challenging times.

Money, of course, cannot buy happiness, but financial security is unavoidably tied to one’s quality of life. The World Happiness Report consistently finds that the happiest countries are the ones whose citizens enjoy relatively high average incomes, peace and order, access to mental and physical health care, social support, and freedom to make life choices.

The hard truth is that while we’re free to make life choices in the Philippines, many of those choices do not come for free and a huge chunk of our population cannot afford them. Everyone wants to send their kids to the best schools and live in good neighborhoods, but private education and prime real estate are prohibitively expensive.

The promise of our economic system and the hope of Filipino entrepreneurs and workers is that if you work hard and make good choices, you can improve your situation and be prosperous. The truth is, it’s hard for the ordinary Juan to make it on his own. We must help each other so we can rise together.

A country of entrepreneurs

According to the Philippine Statistics Authority (PSA), micro, small and medium enterprises (MSMEs) account for 99.5 percent of all businesses in the country. The sector collectively employs over 5 million workers, making it one of the largest contributors to our economy.

It is also one of the hardest hit by the ongoing health and economic crisis. Without the outsize capital of large conglomerates, thousands of local MSMEs were forced to permanently close shop, temporarily halt operations, or downsize.

Recognizing the importance of MSMEs in the country’s economic recovery, the government implemented the Bayanihan to Recover as One Act to help them ease into the pandemic through low-interest loans. Financial institutions have also doubled their efforts to create relevant products and services to help small business owners in their battle for business continuity.

These efforts were not in vain. The Department of Trade and Industry (DTI) released a partial impact assessment survey on the MSME sector last February 8, which found that 52 percent of enterprises have resumed full operations and 42.8 percent have partially opened. While 4.9 percent remain closed, this is a significant improvement from the 30 to 35 percent recorded in April 2020.

While we see promising signs of financial recovery this year, and with the economy slowly normalizing, we must continue striving for a more financially inclusive country.

Digitalization as an enabler

BPIthrough its social development and microfinance arms BPI Foundation and BPI Direct BanKo, recently collaborated with local NGO Restart Micro-Enterprise (RestartME) and social impact expert group FSG Inc. (FSG) for their “Project CASTER” initiative to help MSMEs bounce back from the COVID-19 pandemic.

Through the research grant from BPI Foundation and the technical assistance and participation from BanKo, the scoping study of Project CASTER — which stands for Collective Action Secretariat to Enhance Resilience among MSMEs and MFIs — evaluated the end-to-end business impact of the COVID-19 pandemic on MSMEs and identified solutions to assist them amid these challenging times. It found “online marketing and e-commerce as the most common starting points for MSMEs in embracing digitalization.”

The scoping study, which was conducted from November 2020 to January 2021, emphasized that growing digital connectivity among Filipinos is helping micro-businesses adapt to the new normal.

CASTER also noted that the growing usage of digital payment channels and mobile wallets, such as G-Cash and Paymaya for payments and transfers, encouraged digital adoption for both businesses and consumers. However, persistent fraud concerns mean that cash remains the primary payment preference.

I believe in every crisis, there are opportunities.  Going digital may just be the winning ticket for Juan’s long journey towards financial freedom.