The Philippines continues to pursue digitalization efforts, including the integration of artificial intelligence (AI) across various sectors. This Policy Note analyzes how engagement with digital financial platforms shapes financial inclusion in the country and explores how financial institutions are leveraging AI to enhance accessibility, safety, and security. The study finds that while there is evidence of growth in financial inclusion, barriers persist, such as a lack of funds, high costs, distance, documentation issues, and low trust. Moreover, only universal and commercial banks have integrated AI into their systems, while rural banks and cooperatives continue to face constraints on connectivity, cybersecurity, and regulation.
Although the government has established several key policy frameworks supporting AI and digital finance, significant gaps remain. To address the challenges associated with AI-driven financial inclusion, the authors recommend that the government, the education sector, and industry stakeholders strengthen digital infrastructure, enhance financial and digital literacy, improve cybersecurity, and promote public-private partnerships for responsible, inclusive, and secure AI-enabled digital financial services.
