MORE Filipinos are using digital finance tools, yet barriers continue to keep more than half the population outside the formal banking system, according to a new study by the Philippine Institute for Development Studies (PIDS).
The study, titled “Digital Financial Platform Engagement and Financial Inclusion in the Philippines: Insights on AI Deployment and Policy Implications,” was authored by PIDS consultants Nikka Pesa and Rutcher Lacaza, and PIDS Supervising Research Specialist Mary Grace Agner.
The study found that account ownership in the country nearly doubled from 29 percent in 2019 to 56 percent in 2021. Digital payments now account for 57.4 percent of retail transactions.
Despite the growth, the report noted that more than half of Filipinos remain unbanked. The authors pointed to a gap between rising digital adoption and the pace of financial inclusion.
“Digital financial engagement is a strong and consistent determinant of financial inclusion,” the authors said. They found that Filipinos who actively use digital platforms such as e-wallets, online banking and digital payments are more likely to own and use formal financial accounts.
The study indicated that regular use of these platforms increases participation in the formal financial system, suggesting that frequency and effectiveness of use — not just access — are key factors.
However, the expansion of digital finance has not resulted in universal inclusion. The study identified persistent barriers that continue to exclude many Filipinos, particularly those from low-income households.
These barriers include lack of money, high transaction costs, limited documentation and low trust in financial institutions. Even as digital payments become more common, these constraints limit full participation in formal financial systems for a large segment of the population.
The findings also detailed the growing role of artificial intelligence (AI) in financial services. AI is now embedded in digital platforms and used for fraud detection, credit scoring and chatbot-based customer support.
The study noted that while these technologies can improve efficiency and expand access, adoption across the sector remains uneven. Large financial institutions are leading in AI deployment, while smaller cooperatives and savings banks face structural and resource constraints that limit their ability to adopt such technologies.
The study described an imbalance between strong consumer demand for digital tools and uneven institutional readiness to deploy advanced technologies. This gap, the authors noted, could slow inclusive growth.
The report also raised concerns about trust and security. As digital transactions increase, so do risks related to fraud, data privacy and cybersecurity. These factors can discourage users from engaging more fully with financial platforms.
To address the challenges, the authors recommended strengthening digital infrastructure, expanding financial and digital literacy, and ensuring clear and responsible governance of AI systems.
“By strengthening digital infrastructure, promoting financial and digital literacy, and ensuring responsible AI adoption, the Philippines can transform digital financial platforms into a true catalyst for inclusive and sustainable growth,” the study stated.
The authors also noted that technology alone cannot close the inclusion gap.
“Persistent socioeconomic barriers, institutional disparities and gaps in digital literacy continue to limit participation, calling for stronger collaboration among policymakers, regulators and the private sector,” they added.
The findings were released ahead of the PIDS webinar, “AI and the Future of Work: Implications for Skills, Jobs, and Public Sector Readiness,” held on April 30, 2026.
The event explored how AI is reshaping jobs, skills and institutions, complementing the study’s insights on AI in financial services.
