From the mid-2000s to the present, Philippine microfinance experienced the emergence and development of more financial products and services for different client needs and for various market segments (agriculture, housing, microinsurance). This period also marked a significant growth in industry outreach and portfolio, with two microfinance institutions reaching the 1 million milestone in terms of number of active borrowers. By the end of 2015, the combined outreach of 23 microfinance NGOs reached more than 3 million borrowers while banks had a combined outreach of 1.23 million borrowers.
It was also this period that saw the need for greater accountability and transparency in terms of results and outcomes, as Philippine MFIs felt the effect of microfinance crises happening in different parts of the world. Monitoring and external reporting of performance became an essential responsibility of MFIs as they became increasingly drawn to the concept of inclusive and responsible finance. Local support for Social Performance Management (SPM) and client protection initiatives increased through the years. This was given more thrust as the Bangko Sentral ng Pilipinas, a staunch advocate of financial inclusion, led the crafting and launching of the national Strategy for Financial Inclusion in 2015. It was a landmark achievement that formally defines inclusive finance as a “state where there is effective access to a wide range of financial products and services by all.”
Appropriately designed and widely used products and services for various market segments, especially the unserved and underserved, financial education and consumer protection are among the striking overlaps between SPM and financial inclusion. The 2013 report on the state of financial inclusion in the Philippines highlighted the expansion of the physical reach of banks through the so-called micro-banking offices (MBOs), extended virtual reach through electronic money (e-money) and wider range of affordable financial products through microfinance.
Outreach and portfolio of Philippines MFIs, 2015
Type of MFI
No. of Active Borrowers (in millions)
Total Loans Outstanding (in billion Php)
Php 19.89 B (USD 397 M)
Php 11.4 B (USD 228 M)
*NGO data from MCPI and MIX Market as of December 2015
** Data from BSP as of December 2015
***Data from MCPI Industry Report 2010. The estimate assumes that 80% of members of multi-purpose cooperatives have loans and savings, of which 50% have microfinance loans. It is also assumes that 50% of members of credit cooperatives have microfinance loans.
(Source: 2016 Philippines Social Performance Country Report – Microfinance Council of the Philippines, Inc.)